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Monetising Gold   

The government’s Gold Monetisation Scheme should be able to attract gold ornaments that are lying in many homes and bank lockers for no purpose but occasional use during a wedding or festival. The official estimate suggests 20,000 tonnes of idle gold could be brought into the banking system. A few private non-banking financial companies have tapped the idle gold in homes and spread their operations across the country. There is no open market where gold can be sold or bought. So these companies tapped it by attracting people who needed loans for social occasions or buying consumer goods. The Gold Monetisation Scheme could compete for gold in homes and lockers as under the scheme gold in any form can be deposited with a bank for a period of 1 to 15 years. The bank will pay interest on gold value. If depositors want to redeem their gold, the bank will pay them the prevailing value at the end of the term of deposit. Besides, people could buy sovereign gold bonds in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five years to seven years with a rate of interest to be calculated on the value of the metal at the time of investment. The monetization and gold bonds schemes will be useful to people who have been holding gold and not getting any returns out of it. Plenty of such gold is lying in this gold-crazy country in homes in its cities as well as villages.

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