Munindra Verma – President and Country Head, TBGBullion Business and Trade Finance & ServicesDate: September 13, 2014

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Gold Deposit Scheme (GDA)Product Description Features of the Scheme

Differences from previous GDA concepts

Conceptual

Operational

Intentional

Details of Product description

Account Opening

Transactions

Other features & benefits

Product Flow

Involving INR deposit

Involving Gold Deposit

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Flow Structure – Detail

Opening of Gold Deposit Account (involving INR deposit from customer)

The outcome of this process will result in the following:

• Customer gets notional units of gold

• Bank gets gold deposit, which can qualify for SLR maintenance

• GB gets gold liability on its balance sheet

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Flow Structure – Detail (Cont.)Closing of Gold Deposit Account (involving deposit from customer)

The outcome of this process will result in the following:

• Customer gets physical units of gold

• Bank loses gold deposit

• GB reduces gold liability on its balance sheet

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Flow Structure – Detail (Cont.)Opening of Gold Deposit Account (involving customer's physical gold)

The outcome of this process will result in the following:

• Customer gets notional units of gold

• Bank gets gold deposit, which can qualify for SLR maintenance

• GB gets gold liability on its balance sheet

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Flow Structure – Detail (Cont.)Closing of Gold Deposit Account (involving customer's physical gold)

The outcome of this process will result in the following:

• Customer gets physical units of gold

• Bank loses gold deposit

• GB reduces gold liability on its balance sheet

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For Customer

Incentivizes the customer to defer his gold import to a future date Place current stock of non-jewellery gold with the banking system and earn a

nominal rate of interest All other benefits of e-form of gold Is able to earn some nominal interest on his GDA Does not have to spend on storage of gold

For Bank

GDA with the bank can potentially qualify for SLR

Economy

Deferment of gold imports and hence lower pressure on the current account deficit and Rupee.

Impact

Banks could increase their lending considering the SLR status of the GDA

Lowering the pressure on CAD and Rupee, the GB can play an important role in preserving RBI's FX Reserves

The expected incremental increase in bank lending (and deposits through the multiplier impact) could increase the money supply (M3) in the economy

Benefits & Impact – Proposed GDA

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Gold Bank – Balance Sheet Impact

SourcEIC, YES Bank Ltd

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Participation Certificate

Gold Deposit account and SLR (RBI Policy Variable)

Interest Rate on Gold Deposit Account (RBI Policy Variable)

Gold Deposit Account and Money Supply (RBI Policy Variable)

Capacity of Gold Deposit Account (GB/GoI/RBI Policy Variable)

Taxation (Central Government Policy Variable)

Others

Issues & Concerns

SourcEIC, YES Bank Ltd

Thank You