InvestorQ : Is the gold monetization scheme (GMS) same as the Gold Bond Scheme?
Juvina Maggie made post

Is the gold monetization scheme (GMS) same as the Gold Bond Scheme?

Answer
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Angel dcosta answered.
1 year ago


To begin with one needs to understand one basic thing. The Sovereign Gold Bond Scheme (SGBS) is different from the Gold Monetization Scheme (GMS) that was also proposed by this government a few years back. Under the GMS, households can bring out their gold jewellery, get it avalled and evaluated by an accredited agency and put it as a deposit with a bank. The bank will protect this deposit in terms of grams of gold deposited. The purpose of the GMS was to bring out the 22,000 tonnes of gold that Indian households hold currently and bring them into the productive mainstream.

The SGBS is a deposit scheme where you deposit cash and buy gold in the form of securities instead of physical gold. Currently, each year Indians buy close to 300 tonnes in the form of gold bars and coins. That demand can be shifted to the SGBS. The SGBS pays 2.50% interest per annum. While the rate of interest is definitely attractive, the government could have done a little more to make this scheme more meaningful to the investors.