‘Gold deposit scheme re-launch can cut imports’

Gold and silver refiner MMTC Pamp has proposed a minimum gold deposit of 40 grams after carrying out a survey of 5,000 households

Gold imports can come down by 250 tonnes a year if the government re-launches the gold deposit scheme and mobilises at least one per cent of the estimated 25,000-tonne of idle gold stock lying with Indians, according to gold and silver refiner MMTC Pamp. File photo

Gold imports can come down by 250 tonnes a year if the government re-launches the gold deposit scheme and mobilises at least one per cent of the estimated 25,000-tonne of idle gold stock lying with Indians, according to gold and silver refiner MMTC Pamp.

The current gold deposit scheme, launched in 1999, is beyond the reach of most households as it mandates a minimum deposit of 500g. Only temples and trusts are taking advantage of this scheme and not the general householders.

“There is a need to re-launch the gold deposit scheme with a minimum 40g of gold deposits. Even if we mobilise one per cent of the estimated 25,000 tonnes of idle gold stock, we will be able reduce imports by 250 tonnes a year,” MMTC Pamp Managing Director Rajesh Khosla said.

The company has proposed a minimum gold deposit of 40 grams after carrying out a survey of 5,000 households across the country. “The Reserve Bank of India has said that the proposal looks alright and we are now waiting for a notification,” he said.

Stating that India’s gold demand is unlikely to come down even if the government further tightens import norms, Mr. Khosla said. “The only way is to get the idle gold in circulation through a gold deposit scheme tailored specially for general households and not for banks and large gold holders.”

The proposed scheme would help in balancing the huge gap between demand and supply and bring down the current account deficit (CAD), he added.

If the proposed scheme took off, Mr. Khosla said the company would act as an enabler in the gold deposit scheme since it was the only refinery to be accredited with the London Bullion Markets Association.

MMTC Pamp, a joint venture between state-run MMTC and Switzerland’s PAMP, said under the proposed scheme, it would collect, assay, transport, refine and re-transport gold as instructed by banks.

India, the world’s largest gold consumer, imports 800-900 tonnes of the yellow metal every year. The country is estimated to have imported 410 tonnes in the first half of this fiscal.