India tightens gold deposit scheme due to rising prices

India has partially stopped a program that encouraged households and institutions to deposit idle gold in exchange for interest.

India has partially stopped a program that encouraged households and institutions to deposit idle gold in exchange for interest.

The gold mobilization program has been implemented since 2015, including gold deposits for terms of 1 - 3 years, 5 - 7 years and 12 - 15 years.

The Indian Finance Ministry said that provision of services for gold deposits of 5-7 years and 12-15 years has been stopped. Illustrative photo

Late on March 25, the Indian Finance Ministry said that the provision of services for gold deposits of 5-7 years and 12-15 years has been discontinued due to changing market conditions and the actual performance of the program.

Accordingly, banks can continue to provide short-term gold deposit services based on commercial feasibility.

The move could help reduce the government’s future financial obligations and limit risks related to gold prices. While interest on short-term deposits is paid by banks, interest on medium- and long-term deposits is paid by the government.

Gold prices, seen as a hedge against geopolitical and economic uncertainties, have risen more than 15% this year due to escalating geopolitical tensions and uncertainties related to US tax policy.

The Indian Finance Ministry also confirmed that existing gold deposits will continue to be valid till maturity.

The Reserve Bank of India has revised the overall scheme guidelines to reflect the changes.

Source: https://congthuong.vn/an-do-siet-chuong-trinh-ky-gui-vang-do-gia-tang-cao-380101.html