Gold Investment Schemes: An analytical Study.

3.2 Economics

Submitted By –

Rohit Debnath

UID No. UG17- 86

Academic Year 2018-19

Semester- III (June - October)

Submitted To –

Mr. Sumit Kumar Malviya, Assistant Professor of Economics

Maharashtra National Law University, Nagpur

Introduction

India has an ambivalent relationship with gold. For consumers, gold is a prized asset, cherished as both
an adornment and an investment. For the government, gold is a major contributor to the current account
deficit, a challenge that needs to be addressed. Every country’s economy depends on its natural
resources, banking, financial institutions and foreign trade. India is one of the second biggest
consumers of gold after China as well across the world and imports approximately 463.1metric tonnes
of gold annually, for which around 35 billion we pay every year.1 Indians are emotionally attached with
gold for their loving and storing habit , but it is very harmful for our economy, due to this reason Indian
government import more gold which affect the balance of payment negatively, which reduce the growth
and development of country and further lead to weak economy. It is estimated that Indian consumers
have holed more than 20,000 tonnes of gold over the centuries, which is lies in the bank lockers which
is neither traded, mobilized nor monetized and it evaluated to worth Rs. 60 lakh crore at the current
market price nor contribute to the growth of the Indian economy.2 As Gold is known as a one of the
oldest and precious metal in the world’s fastest growing economy and it is concerned with the wealth
and symbol of status. Gold is a part of India's culture and tradition which is emotionally attached with
the Indians. India was called the country of “Sonay ki Chidiya” (Golden Sparrow) in ancient time. India
is the second largest importer of gold.3 As India import near about 900-1000 tonnes of gold per annum,
for which around $35 billion pay every year.4 Mostly Indians prefer purchase the gold for investment
point of view rather than put their money in the banks. Traditionally Indians buy gold and lock it up in
the almirahs and bank lockers, which cannot generate money and nobody taking benefits from that pile
of gold. In order to provide the benefit the honourable Prime Minister of India Mr. Narendra Modi
launched three gold based financial schemes under the banner of “Swarna Bharat” (Golden India) i.e.
Gold Monetization Scheme, Sovereign Gold Bond Scheme and India Gold Coin Scheme. The Gold
Monetization Scheme has been launched by abolishing Gold Deposit Scheme (GDS) and Gold Metal
Loan (GML) scheme. The main purpose of these schemes invites the households and institutions to
deposit their gold into banks with progressive interest instead of traditional earn interest as well as to
get the rebate in tax.

1
US Global Investors, These 10 countries buy the most gold jewellery, Business Insider, Sep. 26, 2017, 8:58 PM
2
ST Bureau, India's gold hoarders reluctant to lend jewellery to govt. for monetisation scheme, Strait Times, OCT 11, 2015,
3:37 PM
3
US Global Investors, These 10 countries buy the most gold jewellery, Business Insider, Sep. 26, 2017, 8:58 PM
4
PTI, Gold imports rise 22% to USD 33.65 billion in 2017-18 , ET, Jul 27, 2018, 04.07 PM
The fundamental aims of these schemes are to collect the gold held by households and organizations in
the country and bring it for using in productive areas. The scheme will provide the investor with the
opportunity to earn interest by depositing of their unused gold in bank lockers. This analytical project
will study and analyse the gold schemes that have been put up India from the very beginning by the
government of India and providing a detailed study of it.
Aims

The aim of this project is to understand the various gold investment options and schemes in India and to
understand their economic effects in the overall economy. There have been various gold investment
schemes in India. Some of them have been successful and some of them were not. Gold still is seen as
one of the top priorities as an investment scheme among various people. This projects sees the various
schemes and investment opportunities in gold in India.

Objectives

To understand the various gold schemes in India by analysing them in detail and also using various
tools like graphs, charts etc. put a complete picture on the subject.

Research Methodology

The researcher has used doctrinal mode of research. Research articles, surveys, government data, news
articles etc. have been used in this project.
Introduction to gold:

Gold is a comparatively dense, shiny, yellow metal. As an element, gold is quite resistant to corrosion
(by oxygen, but also many other chemicals). “Gold is a chemical element with the symbol Au and an
atomic number of 79. Gold is a dense, soft, shiny metal and the most malleable and ductile metal
known.”5 In ancient times the value of gold had already been discovered. People took gold to make
jewellery and currency. It is a symbol of wealth, beauty and heritage carrying memories and cultures.
However, besides these, gold also makes significant contributions to a wide range of technologies. Due
to its physical features as corrosion resistance and highly malleable and ductile, gold is being applied in
space exploration, nanoparticle technology, and medicine.6 Moreover it is also used as the bonding wire
at the core of an iPhone.7

India’s foreign reserves India’s foreign reserves have grown to nearly $405 billion as of July 20188.
India’s gold holdings were 5.5% of its total foreign exchange reserves in July 2018, down from 9.2% in
September 2011.9 The percentage decrease is due in part because India has added any gold to its
reserves in recent years, even though her total reserves have grown.

Gold Reserves of different countries.10

March 31st, 2016 Oct. 2017

Sr. Country Gold Reserves Official Gold Holdings Gold Official Gold Holdings
No. (Tonnes) (% of Total Reserves) Reserves (% of Total Reserves)
(Tonnes)
1 United States 8133.50 74 percent 8,133.5 75.8 percent
2 Germany 3383.40 68 percent 3,378.2 69.6 percent
3 Italy 2451.80 67 percent 2,451.8 69.2 percent
4 France 2435.40 65 percent 2,435.8 66.6 percent
5 China 1054.10 1 percent 1833.5 2.4 percent
6 Russia 1238.30 13 percent 1526.1 16.3 percent
7 Switzerland 1040.00 7 percent 1,040 6.7 percent
8 Japan 765.20 2 percent 765.2 2.6 percent

5
https://www.sciencedaily.com/terms/gold.htm
6
http://www.elementalmatter.info/gold-properties.htm
7
Jeff Parsons, Your old iPhone is literally a gold mine - and Apple is making a TONNE of money by recycling it, Mirror UK,
20:41, 19 APR 2016
8
Express News Service, Sharp fall in India’s forex reserves: from $424 billion to $405 billion in four months, Indian Express,
August 2, 2018 5:04:24 am
9
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=44425
10
Frank Holmes, Top 10 Countries With Largest Gold Reserves, Forbes, Jul 5, 2018, 12:16pm
 9 Netherlands 612.50 57 percent 612.5 64.1 percent
10 India 557.70 6 percent 557.8 6.4 percent

Top 20 Gold Mining/Producing Countries

There are 20 biggest gold producing nations for 2017; it reveals that the majority of countries
show only slightly higher production rates for 2017. Some of the world’s top-gold producing
countries are as follows in Table 2.11

Sr. Country Production in 2015 (in Sr. No. Country Production in

No. Metric Tonnes) 2015
(in Metric
Tonnes)
1 China 458.1 11 Uzbekistan 83.2
2 Australia 275.9 12 Brazil 80.8
3 Russia 252.4 13 Argentina 64.1
4 USA 216 14 Papua New Guinea 57.2
5 Peru 175.9 15 Mali 49.1
6 Canada 158.7 16 Colombia 47.6
7 South Africa 150.7 17 Kazakhstan 47.5
8 Indonesia 134.3 18 Philippines 46.8
9 Mexico 124.6 19 Tanzania 46.8
10 Ghana 95.1 20 Congo 45.7

INDIAN ECONOMY AND GOLD INVESTMENT SCHEMES

In 2018, India’s gold demand will be between 800 and 750 tones as per World Gold Council. 12
Every year, the shining metal consumption shoots up in India. Despite, of the import control
measures taken up by the government i.e., 10% import tax and 20% of imported gold have to be
re-exported, the country’s unquenchable desire for gold persisted.13

11
Frank Holmes, Top 20 Gold Mining/Producing Countries, Forbes, Jun 13, 2018, 10:12am
12
Reuters, Gold demand in 2018 forecast at around 800 tonnes, below 10-yr average: WGC, The Hindu, Feb, 6 ,2018
13
Ram Sahgal, New gold export rule can be misused, ET, Mar 29, 2017, 09.31 AM IST
 Figure 1: Physical demand for gold Source: GFMS, World gold
Council14

14
https://www.gold.org/research/gold-demand-trends
According to a joint report by Industry body, Federation of Indian chambers of commerce and
Industry (FICCI) and the world gold council (WGC), Indian households spend 8% of its daily
consumption on gold jewelry and coins.15

India is the world’s largest buyer of gold with estimated holdings of 24,000 tonnes.16 This gold is
not being traded or monetized in the form of jewelry. The value is worth $ 800 billion that is
much more than the foreign exchange reserves held by the RBI. 17 95% of our annual demand is
met by imports.18 As India does not have gold mines, it relies upon imports which lead to inflate
current account deficit (CAD) and affects the balance of payments of the country. At present the
current account deficit is Rs. 1.65 Lakh Crore or 1.3% of GDP.19 These attractive gold schemes
pave the way to convert gold savings in to economic investments. Practically, the recent schemes
show signs of safer investment and have to satisfy know your Customer (KYC) norms.

HISTORY OF GOLD FAILURES

1. The first gold bond-6.5%, 15 year instrument was floated in Nov 1962, but it could collect only 16.7
tonnes.20
2. Another bond in March 1965 and it could mobilize even less and collect only 6.1 tonnes.21

3. The National Defence Gold Bond Scheme in 1980 and it raised only 13.7 tonnes gold.22

4. Another Gold Deposit Scheme (GDS) was approved by the Central Bank RBI in November 15,
1999.23
4. DIFFERENT TYPES OF GOLD SCHEMES
4.1 GDS: GDS is like fixed deposit which earns interest. In GDS, the gold melted and converted
to a bar, and the minimum quantity of gold deposited was 500 grams and the period of deposit
ranges upto years, with a minimum lock-in period of 1 year. GDS allows maximum 1% rate of
interest per annum.24
4.2 GML: It is specially launched for domestic jewelry manufactures or exporters. With the help of
this scheme, the authorized banks gives the loan and lease facility to the Indian jewelers or

15
ET Bureau|, Indian households spend 8% of its daily consumption on gold jewellery and coins , ET, Dec 10 ,2016
16
: Banikinkar Pattanayak, Indian households have record gold hoard of Rs 24,000 tonnes worth $800 bn, Financial
Express, January 25, 2017 11:52 AM
17
Ibid.
18
Rajendra Jadhav, India gold imports surge 67 percent in 2017 on restocking, retail demand – GFMS, Reuters, January 2,
2018 / 4:15 PM
19
PTI, India’s GDP to grow at 7.5% in FY19; Current Account Deficit and Rupee a worry, says Care Ratings report, Financial
Express, May 24, 2018 8:14 PM
20
Tamal Bandyopadhyay, Will the gold schemes glitter? , , Livemint , Mon, Sep 21 2015. 12 08 AM IST
21
Ibid.
22
Ibid.
23
Ibid.
24
Revamped Gold Deposit Scheme (R- GDS), https://www.sbi.co.in/portal/web/personal-banking/revamped-gold-deposit-
scheme-r-gds
 exporters and in lieu of they (bank) receive cash as interest which is close to international interest
rate because of the banks acquire the gold on lease from the international financial market with a
time interval belonging to 90 to 180 days for domestic players or jewelers and 270 days for
exporter with Stand-By Letter of Credit (SBLC) or Bank Guarantee (BG) from a third party bank on
behalf of the international financial market.25
4.3 Gold Monetization Scheme: GMS offers gold owners to deposit their gold in the banks, and get
interest on it. Basically GMS = GDS+GML. Under this scheme, depositors can deposit gold and
Jewelers can avail gold as loan.26 India imports as high as 725 Tonnes of gold each year.27 High
gold import contributes to already high fiscal deficit of India. On one side India is importing
tonnes of gold each year, on other side Indian households carries 23,000- 24,000 Tonnes of gold
reserves.28 Indian government is trying to bring out a part of gold locked in household reserves.
29
Even lot of temple trusts in India has huge reserves of gold with them.30 GMS plans to tap temple
trust gold reserves as well. Gold monetization means India’s gold import bills coming down to
much lower levels. Even if 10% of total household gold is monetized, it will do a world of good to
our fiscal deficit.
The new GMS is a gold saving account in which households and institutions deposit their gold in
physical form like jewelry, coins or bars which can predefined period and earn regular interest
which depend on gold weight and exempted from the tax. The interest amount is depending on
deposited gold and it can also in the form of gold. At the time of maturity, gold gets heavier
because of interest generate regular on gold and peoples have an option to get principal plus
interest accrued in the form of gold or cash. GMS may help reduce in amount on import of gold to
fulfill the domestic demand and may create some positive impact over the year.
Objectives of GMS
 To use the unproductive Gold in productive manner.
 To give the customers an option to earn interest on their Gold holdings.
 To decrease dependency on import of Gold over time to meet the demand.
 To encourage the jewelry sector in the country by providing Gold available as raw material on
loan from the banks.
5. MERITS OF GMS
i) The GMS is a good technique to stop the black money which, engaged in
the form of gold.
ii) With the help of GMS, the import of gold will reduce because of

25
ICICI Bank, https://www.icicibank.com/corporate/forex-treasury-ser/gold-metal-loan/index.page
26
GMS, RBI, https://www.rbi.org.in/SCRIPTS/NotificationUser.aspx?Id=10084&Mode=0
27
Rajendra Jadhav ( Reuters) , India’s gold imports may fall 18% in 2018 as price rise cuts demand, Livemint, Tue, Jun 12
2018. 04 46 PM
28
Scroll Staff (Reuters), Indians are the world’s largest hoarders of gold, finds study, Scroll, Jan 25, 2017 · 11:00 am
29
Ibid.
30
T Narasimhan, Temples hold about 4,000 tonnes of gold, Buisness Standard, March 24, 2016 22:41 IST
 enough quantity of gold will be available in home country.
iii) Low quantity of imported gold will help to reduce the Current Account
Deficit and foreign trade, which provide stability in Rupee, inflation
rate and overall macro economy
iv) The GMS will provide the availability of the loan with the banks and gold will be taken as a
raw material in Gems and Jewellery (G&J) industry.31
v) GMS is a good tool for customers, who are planning to buy gold at lower rate. Therefore, the
gold prices will decrease.32
vi) As gold prices have not fluctuated significantly during 7-8 years. Therefore, GMS will be a
good track to earn interest by depositing gold.
vii) Jewelers and investors may also take more money as credit by using their Gold Saving Account.33

viii) With the new GMS the accumulated gold will allow government to channelize the money in
the form of cash to acquire the asset or capital formation to develop the infrastructure and
industrial growth. Generally mostly Indians are emotionally attached with gold. Due to this
they don’t want to deposit their gold in banks.
ix) In India, peoples have no technique to analyses the purity of gold with gold seller and there
are few reputated and branded gold dealers are available to sale the gold with purity
parameter certificate. Under GMS this facility is also lacking.
x) Under GMS, some fixed charges or fees will be paid by the customer to purify the gold at
testing centres, which will create extra financial burden on investors.
xi) There are no fix parameter or slab for capital gain and tax exemption/rebate in connection
with gold deposited in banks by the investors.34

6. DEMERITS OF GMS
i) Those accumulated gold will be deposited in the banks by the consumers, would not be kept as
before, it will be treated as scrap and further will be melt by taking the consent of investor.
As a result investor will have to receive in modified form of gold i.e. coins and bars.
ii) Under the GMS Purity Testing Centres and Hallmark Centres are available in most of metro
cities rather than in urban and semi-urban areas. Due to this reason the banks are located in

31
https://www.bullionstar.com/gold-university/indian-gold-market
32
10 Things You Need To Know About Gold Monetisation Scheme, https://www.bankbazaar.com/gold-rate/10-things-you-
need-to-know-about-gold-monetisation-
scheme.html?ck=Y%2BziX71XnZjIM9ZwEflsyDYlRL7gaN4W0xhuJSr9Iq7aMYwRm2IPACTQB2XBBtGG&rc=1
33
Ibid.
34
The Hans India, An overview of gold monetisation scheme performance in India, The Hans India, May 15,2017 , 09:55 PM
IST
 rural areas will not collect the gold from investors belonging from same area.35
iii) Underthe GMS the awareness is very low in rural areas that are why the people will not
deposited their gold in banks; as a result it will decrease the quantity of gold with banks.36 In
addition to this the rural people will not get benefitted under this scheme.37

5. CHALLENGES AGAINST GMS

Gold jewelry, especially inherited and having sentimental attachment among the investors and many
people won't like to perceive it melted down.
The average gold investor is a conservative person who doesn't like to part with his gold for a
certificate from the bank. In order to make proper implementation and pool of maximum gold from
people, government needs to change the psychological thinking of investors.
A bigger problem related to Wealth tax issues is that depositing gold could open a can of tax
worms. True, the bank will not ask any questions when investors submit the gold. But this is not an
amnesty scheme and the tax department might want to know if they have paid wealth tax on the gold
in the previous years.38
The process of testing for purification and determination of the quality of gold is a difficult process
for both the consumers as well as the bank. In India few refineries are available and located at urban
and sub urban areas which may create transportation problems for the rural people.39
Banks are major player to implement the GMS. However it is very difficult task for banks to
manage all the things on their own. Therefore involvements of various intermediaries are necessary
for the smooth working of this scheme which will further increase the transaction and handling cost
for the banks and jewelers.40

35
Ibid.
36
Rediff Bureau, Real reason behind the failure of govt's gold schemes, RediffNews, May 16, 2017 17:33 IST
37
Ibid.
38
Rediff Bureau, Real reason behind the failure of govt's gold schemes, RediffNews, May 16, 2017 17:33 IST
39
Ibid.
40
Ibid.
Benefits of GMS to different parties

Bank Governme Consumers

nt
Banks may sell the gold to promote the Under the GMS, The import bill of The gold prices fall in
foreign currency in order to generate our country may decrease from 10 the future
money that can then be further used for to 20 per cent even if 1% of the
lending to exporters / gold having with people is
importers. deposited into banks.

Gold Coins and Bullion Scheme

According to this scheme, India has minted a gold coin as part of the GMS scheme. This scheme
reduce dependence on imports of gold and demand for coins imprinted outside India and also help
to recycle the gold which is available in India. Now India has its own gold coin. The second gold
scheme is GCS.41 In gold coins 24 Karat pure gold available and it will have the National Emblem
of “Ashoka Chakra” incise on one side and Mahatma Gandhi on the other side, as a part of a broader
push to make people deposit gold with the government. The gold coin is available in 3 sizes i.e. 5,
10 and 20 gram. About 15,000 coins of 5 gram, 20,000 coins of 10 gram and 3,750 gold bullions
will be made available through MMTC outlets.42 On Jan. 22, 2016 The Reserve Bank of India
permitted banks to sell India Gold Coins (IGC) through their branches.43

Sovereign Gold Bond Scheme (SGBs):

The RBI, in consultation with the Government of India, has launched the Sovereign Gold Bonds
Scheme on July 2016 for public issue.44 The main aims of this scheme to motivate the investors in
demat gold bonds to make the reduction in imported gold.45 The bonds will be issued by RBI on
behalf of the Government of India. It is an indirect way of investing in gold. The investor can
invest in gold in a paper form and the underlying asset which is gold in this scheme. In this
scheme, jewelry, coin or bar does not acceptable.46 This scheme’s intent is to convert the demand for
physical gold, as an investment avenue, to paper gold. Rather than buy physical gold, investors
would buy paper gold. The amount of gold bond increases according to the gold market conditions.
The government receives money from investors, who invest in the bond, and pays a fixed periodic

41
Zee Media Bureau, What is Gold Coin or Bullion Scheme and how can you take advantage of it, Zee News, Nov 05, 2015,
12:24 PM IST
42
Ibid.
43
PTI, RBI Allows Banks to Sell India Gold Coins, NDTV, January 21, 2016 22:54 IST
44
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=35980
45
ET Bureau, Bond with gold: Get the benefits of yellow metal minus the hassles, ET, Oct 30, 2017, 03.51 PM IST
46
Ibid.
 interest known as coupon on it. On maturity, the investors receive the money. In same manner, in a
gold bond, people, such as households and investors, will be able to give credit money to the
government by investing in a bond whose price will be based on the price of a certain quantity of
gold. On this, they will receive a coupon periodically (apporx.1.5-2%). When bond get
mature/sale, the bond holder will receive an amount equal to those value depend on the
underlying amount of gold on same date. Therefore, they shall receive the same return as
purchasing gold bars/coins and selling them later, when their price goes up.
the ongoing market price at the time of redemption/ premature redemption. The bond offers a
superior alternative to holding gold in physical form. The risks and costs of storage are eliminated.
Investors are assured of the market value of gold at the time of maturity. Gold bonds are free from
issues like making changes and purity in the case of gold in jewellery form. The bonds, to be sold
by the banks and designated post offices either directly or through their agents, can be also be held
in the demat form eliminating risk of loss of scrip.

PRICE/ INTEREST: The bonds bear interest at the rate of 2.75 % (fixed rate) per annum on the
amount of initial investment. The bonds are issued in denominations of one gram of gold and in
multiples thereof.47

Minimum investment in the bond will be two grams with a maximum buying limit of 500 grams
per person per fiscal year.
The price of the bonds will be fixed by the RBI on the basis of the previous week’s (Monday –
Friday) simple average price for gold of 999 purity. The average price of gold is published by
the India Bullion and Jewellers Association (IBJA)?
Resident Indians including individuals, HUFs, trusts, universities and charitable institutions can
hold these bonds.48

REDEMPTION: On maturity, the redemption proceeds will be equivalent to the prevailing market
value of grams of gold originally invested in Indian Rupees. The redemption price will be based
on simple average of previous week’s (Monday-Friday) price of closing gold price for purity
published by the IBJA. Both interest and redemption proceeds will be credited to the bank account
furnished by the customer at the time of buying the bond.49

WHY IT’S GOOD: As investors will get returns that are linked to the market price of gold, the
scheme is expected to offer the same benefits as physical gold. The big advantage is 2.75 % interest
on bonds. They can be used as collateral for loans and can be sold or traded on stock exchanges.
Bonds can be sold or transferred also to other persons. Parents can buy bonds in the name of their
minor children.The government hopes to kill two birds with one shot.50

47
SGB FAQ, https://www.bankofindia.co.in/ENGLISH/SGB_FAQ2.aspx
48
Ibid.
49
George Mathew, Explaining the ABC of gold bonds, The Indian Express, November 5, 2015 4:10:09 pm
50
https://tradingqna.com/t/in-gold-we-trust/6776
GOLD COIN

 Prime Minister Narendra Modi launched India’s first Gold Coin bearing the national emblem-
the Ashok Chakra on one side and Mahatma Gandhi’s image engraved on the other side, as a
part of a broader push to make people deposit gold with the government.51
 The coins will initially a52vailable in denominations of 5 and 10 grams. A 20 gram bar or
bullion will also be available. About 15,000 coins of 5 gm, 20,000 coins of 10 gm and 3,750
gold bullions will be made available through MMTC outlets.
 The Indian Gold coin is unique in many aspects and will carry advanced anti-counterfeit
features and tamper proof packaging that will aid easy recycling.
 These coins will be distributed through designated and recognised MMTC outlets.

51
https://www.gold.org/news-and-events/press-releases/indian-pm-narendra-modi-launches-indian-gold-coin-and-indian-gold-
bullion
52
Ibid.
 E Wallets
E wallets have taken in the Indian financial system by storm in the past few years.
Demonestisation has also played a huge role in using of these platforms by the people. But since
there expansion they have also started offering digital gold. Two such companies like paytm and
phonepe offer comprehensive solutions to provide digital gold to people. If you have a Paytm e-
wallet, one can buy and sell gold in digital and physical forms. Though there is a monthly
transaction limit of Rs20,000 and a daily transaction limit of Rs5,000 for using the e-wallet, one
can buy gold of any amount using other payment modes on the same platform. A user can use
payment modes such as net banking, credit card or debit card on the same platform and don’t have
to load the wallet to buy gold. To enable this service, Paytm has partnered with MMTC-PAMP
India Pvt. Ltd—a joint venture between MMTC Ltd and PAMP Switzerland. The minimum unit
you can buy is 0.1gramAll Gold prices are linked with the rates in the commercial bullion market.
Every rupee collected from customers is used to purchase physical 24 Karat gold.53
Phonepe , another E wallet backed by Flipkart have partnered with SafeGold, a vault company to
launch this category. SafeGold has appointed IDBI Trusteeship Services to protect the interest of
customers with regard to their gold purchases. IDBI Trusteeship Services is jointly promoted by IDBI
Bank Ltd., LIC of India, and GIC of India. The gold id physically stored in secured vaults and is
delivered on demand by a customer.54
So in this way gold investments can also be made thorough E wallets.
Motilal Oswal is another company which provides online gold at realtime prices in India.55

53
Preeti Motiani, Here are two ways to buy gold online, ET Online, May 17, 2018, 04.49 PM IST
54
Ibid.
55
https://www.motilaloswal.com/technology/stock-market-investor/digital-gold.aspx
CONCLUSION
As India is known as poor country but in fact it is very rich in natural resources as well as with other
items. India has around 20,000 tonnes of gold lying with Indian households and temples. The key to
the success of the investment scheme will be depending in the hands of Indian households, temples and
investors. In addition to this it has been observed that GMS helped to reduce India`s CAD after initiation
of GMS. Creating awareness among the consumers over the presence and benefits of scheme shall be
critical (especially for the rural population), along with offering them attractive interest rates to part
away with their gold holdings. The interest rates on deposited will start from the next day after
depositing the gold, which was not available in other previous gold schemes. New forms of investment
like online gold,E wallet etc are also making themselves as an alternative to offline gold investment in
India. Gold coins and bars are easily available for the peoples which are used as investment assets. Gold
bonds are available in demat form which is very secure and easy for using.