Indian government attempts to lure the population away from physical gold
Duncan Richardson, News Editor
5 Nov 2015, 2:20 p.m.
Indian Prime Minister, Narendra Modi, has launched 3 government backed gold schemes in attempt to reduce physical gold demand and free up 20,000 tonnes of gold held by Indian households. In the first 6 months of 2015 the Indian population bought 562 tonnes of gold.
Under the Gold Monetisation Scheme (GMS) Indian residents will have the option to deposit their gold and receive 2.5% annual interest payment. Whilst under the Sovereign Gold Bond Scheme investors will receive 2.75% for purchasing paper bonds.
Modi also unveiled the countries first ever gold coin bearing Ashok Chakra the countries national symbol. Initially the coins will minted in denominations of five and ten grams. The Indian population have a long held affinity with physical gold and at this stage it is unclear if Indians will be willing to hand over their physical metal for a paper certificate.