Effectiveness of Gold Monetization Scheme
The Gold monetization scheme requires a deposit of gold to the bank. The bank checks the purity of gold and decides the value. Then the gold is melted and converted to gold coins. This means if you deposit gold jewellery in the bank under the GMS, then at the time of maturity after the specified period, you will not receive the gold in its original shape and form. This may be the reason why this scheme has not received the desired response because most people like the gold to be returned in the sale form as it was deposited. People have some sentimental values attached to gold jewellery so they don’t like the idea. Gold jewellery is kept for future purposes like weddings etc. Again many families keep gold for emergency purposes because it is easy to sell gold and arrange funds. They do not prefer to deposit gold in a bank to earn money as annual interest. The individuals or trusts who store gold only for investment purposes may find GMS a suitable option.