By A Staff Reporter

Kathmandu, Mar : 6 Nepali citizens can now put gold in banks as interest-earning deposit.
Nepal Rastra Bank (NRB), the country’s central bank, introduced the gold deposit scheme by issuing a directive Thursday to the commercial banks.
NRB has introduced the directive on gold deposit scheme today as per the provision of the annual budget 2019/20.
While presenting annual budget for the current fiscal year, the 2019/20, Finance Minister Dr. Yuba Raj Khatiwada stated that necessary mechanism would be developed to allow Nepali citizens to deposit gold, silver and other precious metals in banks as interest earning deposits.
As per the directives, the banks will accept minimum of 25 grams gold as deposit where the banks should fix a separate mechanism to measure purity and weight of gold as 995 fitness of gold is required for deposit.
The duration of deposit of gold should be at least three years and up to five years. There is a provision to renew the deposit after completing the earlier deposit time.
The consumers should sign an agreement with the concerned bank in the beginning to take interest and principal gold as gold/or cash after the maturity of the deposit period.
The banks can fix the interest rate of gold deposit themselves.
The banks should provide interest quarterly for those customers who want to take interest in cash and should provide gold calculating compound interest quarterly after the end of the deposit time for those customers who want to receive gold instead of cash as interest.
As per the provision, consumers should disclose source while depositing gold worth up to Rs. 1 million.
The banks will issue Gold Certificate to the depositors which can be easily tradable in the market and/or the certificate holder can take loans up to 70 per cent of the deposit value with the certificate as collateral.
The interest rate of this kind of loan will be 2 per cent higher than that taking interest of deposit of gold.
Spokesman at NRB Dr. Gunakar Bhatta said that gold deposit scheme would mainly support to bring gold in the banking system and the people can monetize the gold which was lying idle at home.
The gold deposit is surely attractive for individuals but at the same time it is also beneficial for the banks, he said.

The gold deposits that banks receive can't be taken out as loan, but can be used to fulfil the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements set by the central bank.
Banks can have a maximum of 25 per cent of CRR in gold.