In a move which will it hopes will in some way help resolve India’s 'insatiable appetite’ for gold and the attendant problems with the high current account deficit (CAD), MMTC-PAMP, a 27:73 per cent joint venture between India’s largest bullion importer MMTC and Swiss PAMP SA, is ready with its gold metal account scheme to mobilize gold from small consumers who account for a bulk of gold demand.
The minimum deposit will be around 50 grams of gold and that will address more than 90 per cent of gold consumers in India, Rajesh Khosla, managing director, MMTC-PAMP India told this correspondent.
The scheme would help small retail gold consumers, deposit their gold, melt it and earn interest on it and accrue gold instead of rupees in the account at the time of maturity. On the implementation of the scheme, Mr. Khosla said the Reserve Bank of india (RBI) would submit its views in early December after which the government would take a call on the scheme.
"If there is a favorable report, we plan to have a soft launch of the scheme this financial year and a full-fledged launch next year," he said.
The World Gold Council (WGC) estimated that there is around 25,000 tonnes of gold above ground in India among Indian households, making it the biggest resource of the metal globally. "The demand is there and annual regulated manageable import is around 550 tonnes but demand is around 800 tonnes," Mr. Khosla said, adding, "but even if 1 per cent of household gold holding or 250 tonnes is mobilized annually, the demand issue is solved."
As regards purity verification centres, the company has set up three on a trial basis in Delhi with one each in Hyderabad and Bengaluru to follow. The company’s gold refinery near Delhi was set up at a cost of Rs 200 crore with a capacity of 150 tonnes. "Once the scheme is launched, we can hike capacity to 200-250 tonnes in two or three years," Mr. Khosla said.
The company has developed an advanced software for the scheme. "We have made presentations to many banks which have evinced interest as we are the only London Bullion Market Association (LBMA) - approved refiner in India. We are hopeful of the regulator’s go-ahead."
