NITI bats for having gold as part of CRR
Government think-tank NITI Aayog has suggested that deposits mobilised by banks under the Gold Monetisation Scheme (GMS) should be included in the cash reserve ratio (CRR).
In a report, the committee headed by NITI Aayog Principal Adviser Ratan P Watal also recommended that the transfer of gold collected under the scheme should be exempt from the purview of GST. “Deposits mobilised under GMS may be considered for CRR,” the committee suggested.
It further said the government could consider initially setting up a bullion exchange.
“In due course more exchanges may be set up in the domestic market,” the committee, which was constituted to recommend measures to transform India's gold market, suggested. In 2015, the government launched the GMS with the objective of mobilising gold held by households and institutions in the country. The scheme allows banks’ customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25 per cent to 2.50 per cent.
Recently, the Reserve Bank of India (RBI) made changes in the Monetisation scheme to make it more attractive.
The revamping of the scheme was aimed at enabling people to open a hassle-free gold deposit account. The short-term deposits should be treated as bank's on-balance sheet liability, the RBI said in a notification in June.