In a bid to channelize idle gold for productive purpose, curb the import of physical gold and help reduce the current account deficit, the Reserve Bank of India (RBI) has relaxed rules on gold deposit scheme offered by banks by allowing the lenders to offer the product with lesser maturity.
Now, the banks can offer gold deposits maturing in 6 months to 7 years period compared with 3 years to 7 years earlier. RBI also said the banks do not need to obtain its approval for floating such schemes.
The RBI plans to mobilize the unused gold by lending it to importers and exporters of the yellow metal and wants banks to encourage products linked to accepting physical gold as deposits and investing public money in gold related products. Sebi registered mutual funds and exchange traded funds may deposit under the scheme
This is a good announcement from RBI though the current gold deposit scheme like SBI Gold Deposit Scheme has a minimum deposit requirement of 500 gms which keep off normal citizens. Once the minimum deposit requirement is lowered by banks, this will get investors due interest.