Banks Free to Fix Interest Rates on Gold Deposit Scheme: RBI

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New Delhi: The Reserve Bank on Thursday issued guidelines for the Gold Monetisation Scheme that allows banks to fix their own interest rates on gold deposits. The gold deposit scheme is aimed at mobilizing a part of an estimated 20,000 tonnes of idle precious metal with households and institutions.

As per the guidelines, banks will be free to set interest rate on such deposit, and principal and interest of the deposit will be denominated in gold. The notification says that the designated banks will accept gold deposits under the Short Term Bank Deposit, Medium and Long term Government Deposit Schemes.

As per the RBI guidelines, there will be provision for premature withdrawal subject to a minimum lock-in period and penalty to be determined by individual banks.

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