(Reuters) – India has discontinued parts of a scheme that impressed households and institutions to deposit idle gold in commerce for curiosity funds.
The gold monetisation scheme, launched in 2015, included gold deposits for 1-to-3 years, 5-to-7 years and 12-to-15 years.
The 5-to-7 and 12-to-15 yr deposits have been discontinued, the finance ministry talked about late on Tuesday, citing evolving market circumstances and effectivity of the scheme.
Banks can proceed to provide short-term gold deposits based mostly totally on enterprise viability, the ministry talked about.
The switch is extra more likely to reduce the federal authorities’s future obligations and minimise risks related to gold prices. While banks paid the curiosity on the short-term deposits, the federal authorities paid it for the medium- and long-term ones.
Prices of gold, which is seen as a hedge in opposition to geopolitical and monetary uncertainties, have risen higher than 15% this yr, pushed by escalating geopolitical tensions and uncertainties over U.S. tariff protection.
The present gold deposits will proceed until their maturity, India’s finance ministry talked about.
The Reserve Bank of India has amended its grasp directions on the scheme to account for the modifications.
(Reporting by Aleef Jahan in Bengaluru)
