The country's gold imports could come down by 250 tonnes a year if the government re-launches a gold deposit scheme and mobilises at least one per cent of estimated 25,000 tonnes of idle gold stock lying with Indians, according to the gold and silver refiner MMTC Pamp.
The current gold deposit scheme, launched in 1999, is beyond the reach of most households as it mandates a minimum deposit of 500 grams.
Only temples and trusts are taking advantage of this scheme and not the general householders. There is a need to re-launch a gold deposit scheme with a minimum 40 grams of gold deposits.
"Even if we mobilise one per cent of the estimated 25,000 tonnes of idle gold stock, we will be able reduce imports by 250 tonnes a year," MMTC Pamp Managing Director Rajesh Khosla said.
The company has proposed a minimum gold deposit of 40 grams after carrying out a survey of 5,000 households across the country.
The RBI has said the proposal looks alright and we are now waiting for a notification, he said.
Stating that India's gold demand is unlikely to come down even if the government further tightens import norms, Khosla said. The only way is to get the idle gold in circulation through a gold deposit scheme tailored specially for general households and not for banks and large gold holders.
The proposed scheme will help in balancing the huge gap between demand and supply and bring down the current account deficit (CAD), he added. If the proposed scheme takes off, Khosla said the company will act as an enabler in the gold deposit scheme since it is the only refinery to be accredited with London Bullion Markets Association.
MMTC Pamp, a joint venture between state-run MMTC and Switzerland's PAMP, said under the proposed scheme it will collect, assay, transport, refine and re-transport gold as instructed by banks. India, the world's largest gold consumer, imports 800-900 tonnes of yellow metal every year. The country is estimated to have imported 410 tonnes in the first half of this fiscal.