13th September, 2014

-BHARGAVA N. VAIDYA

e-mail : bnv1964@yahoo.co.in

MAKING GOLD MONETISATION SCHEME WORK

B.N. VAIDYA & ASSOCIATES

HISTORY

• SHOP FLOOR STOCK WAS LOW

• GAP RUN BY MOST JEWELLERS

• GOLD DEPOSIT SCHEME (GDS) ALSO

POPULAR WITH MANY

B.N. VAIDYA & ASSOCIATES

THEN

• High Interest Rate for Gold

• Accumulation with Jewellers

• No Legal restriction on acceptance of Deposit or Collective Savings scheme

B.N. VAIDYA & ASSOCIATES

Analysis of Gold Scheme 1999

Background

• No Gold lease through Imports

• Market Lease rate on Gold around 9 %

• Fixed & stable rate of Import duty

• Plan to use Hallmarking Centers

B.N. VAIDYA & ASSOCIATES

Negative Points Gold Deposit Scheme 1999

• Available of Cheaper International Gold lease ( 1% against deposit cost of 3 %)

• Trouble from Local Levies (Octroi etc)

• Duty variation risk and balance sheet cost of it

• No incentive for bank or staff

B.N. VAIDYA & ASSOCIATES

WAY OUT

1.Institutional

2.Legal Support

3.Structural Changes

4.Execution issues

5.Taking all stake holders along.

B.N. VAIDYA & ASSOCIATES

B.N. VAIDYA & ASSOCIATES

B. N. VAIDYA & ASSOCIATES

INDIA

A

MAJOR

BULLION & JEWELLERY

HUB

B. N. VAIDYA & ASSOCIATES