Traditionally, most Indian families accumulate gold coins / bars on some occasions (festivals) or when they have some savings in bank account. They incur additional cost of preserving such gold coins in bank lockers. The price of gold coins would be appreciating over the years but the weight (grams) you have purchased remains the same. This gold remains idle (unused) in buyer’s locker for years.
Now, as we know there is shortage of gold during peak seasons and Jewellers Trade Federation needs to import gold which impacts Current Account Deficit (CAD) of the country. So, in the interest of controlling current account deficit of our country and to bring back the idle gold coins in lockers to the circulation, All India Gems and Jewellery Trade Federation has executed a plan in which eligible jewellers are working as nominated agents and helping to collect idle gold from households and temple trusts. Trade federation is expecting that this move will benefit our country in cutting import of gold and investors would multiply their gold coins. So, it’s a win-win situation for government and investors. These actions were announced in Oct, 2013.
Tribhovandas Bhimji Zaveri (TBZ), a trusted brand in gold jewellers has been nominated to collect idle gold coins from household / temple trusts under the scheme “TBZ Gold Plan.” Let us go deeper to understand this scheme in detail.
Features of TBZ Gold Plan is as follows:
- You can deposit 24 karat gold coins and bars with TBZ for 361 days (investment period) and earn returns (i.e. interest) in the form of additional gold accruing on the maturity date.
- You can avail redemption with accrued returns on the maturity date within 90 days thereof.
- TBZ verifies purity of the gold that a participant is seeking to invest under this plan, and only accepts the gold approved by it for the plan. In this scheme, you can invest TBZ gold coins / bars as well as purchases made from other jewellers in the past as well.
- You can deposit a minimum of 10 grams worth gold coins and bars and thereafter in multiples of 5 grams up to an overall maximum of 500 grams.
- On maturity, gold depositor is eligible to get hallmarked 24 karat gold coins / bars manufactured by TBZ, of the same specifications as the gold deposited.
- You are not entitled for any other benefit or interest in cash on the gold placed with TBZ under this scheme.
- You can exit from the plan at any time prior to the maturity date by making a written application to TBZ. You will get back gold of the same specifications from TBZ. However, you will not be entitled for any other benefits or returns on the gold under the plan.
- Also, if you request for an exit from the scheme within 3 months from the date on which the gold is accepted by TBZ, then you are liable to pay Rs 500 as processing fee and applicable service tax.
Documents required for Gold Deposit Scheme
- Depositors and nominee pan card copy
- Photocopy of electricity bill / telephone bill / bank passbook
- 2 passport size photographs
Illustration of Gold Deposit Plan
Scenario I: Gold purchased from TBZ and simultaneously deposited
Assume, you purchased 100 grams of gold coins / bars from TBZ and decided to deposit simultaneously in this scheme. Then, you are eligible to get 10% additional gold on your deposit.
So, after 12 months (361 days) you will receive 110 grams of gold coin from TBZ.
Scenario II: Gold purchased from TBZ or any other shop in the past and now decided to deposit under this scheme.
Assume, you deposited 100 grams of gold coin / bars which was unused and lying idle in locker. Then, you are eligible to get 5% additional gold on your deposit.
So, after 12 months (361 days), you will receive 105 grams of gold coins from TBZ.
Financial Rating of TBZ
You would be interested to know financial health of TBZ while depositing your gold in this scheme. So, given below is a snapshot of rating assigned to TBZ by CRISIL. The ratings assigned to the company as on May 2013, are as follows:
Long term rating = CRISIL A- (Reaffirmed) which indicates stable,
Short term rating = CRISIL A2+ (Assigned)
Trustworthiness of TBZ
Most depositors may have the fear of getting cheated by TBZ when they get back gold coins / bars on maturity. However, please note the TBZ is into jewellery business from the past 149 years. They have created a brand for themself and earned the trust of people from all these years. So, I recommend it’s better to take an advantage of such scheme to multiply the idle gold coins in our lockers.
If you love to accumulate gold and keen to see it grow (multiply), then we recommend you deposit the gold in this scheme instead of keeping idle in lockers and incur additional cost in terms of rent for locker. Here, you will earn returns worth 5% more gold if getting back old gold coins to deposit or will earn 10% more gold if depositing new gold coins simultaneously while purchasing from TBZ stores. I personally, deposited my gold coins in this scheme after explaining benefits to my parents who traditionally love to accumulate gold coins and preserve in lockers for future use.