Munindra Verma President and Country Head TBG Bullion

Munindra Verma – President and Country Head, TBG Bullion Business and Trade Finance & Services Date: September 13, 2014

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 2

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 3

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 4

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 5

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 6

Benefits & Impact – Proposed GDA 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 (M 3) in the economy 7

Gold Bank – Balance Sheet Impact Sourc. EIC, YES Bank Ltd 8

Issues & Concerns 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/Go. I/RBI Policy Variable) Taxation (Central Government Policy Variable) Others Sourc. EIC, YES Bank Ltd 9

Thank You