13th September, 2014
-BHARGAVA N. VAIDYA
e-mail : [email protected]
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
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