Gold can be deposited under the GMS with a designated bank in the account of the Central government.
Mumbai: The Reserve Bank on Tuesday asked banks to "immediately" pay interest due on the gold deposited by individuals and institution under the Gold Monetization Scheme (GMS) launched in 2015.
The government had launched the scheme to curb imports of gold, which has a bearing on current account deficit.
Gold can be deposited under the GMS with a designated bank in the account of the Central government for a medium-term period of 5-7 years or a long-term period of 12-15 years.
In a notification, the RBI said reimbursement of payments made by banks, relating to Medium and Long-Term Government Deposit (MLTGD), will be made by its Central Account Section (CAS), Nagpur.
"Accordingly, banks are advised to pay immediately the interest amount already due to the depositors and to take note that, in future, payment of interest to the depositors is to be made on the due dates," said the notification.
After making payments, the banks may raise the claim to the government through RBI, the notification added.
The rate of interest on gold deposit is decided by government and notified by Reserve Bank of India from time to time.
The annual rate of interest on medium-term deposit is 2.25 percent and on long-term deposit, it is 2.50 percent.