Reliance My Gold Plan launched in India
Reliance Money Precious Metals Private Limited (RMPM) has launched a new gold accumulation plan in India called ‘Reliance My Gold Plan’. The plan has been established in association with the World Gold Council as marketing partner.
According to Reliance Money’s website, My Gold Plan is offered to customers to enable them to accumulate physical gold in small quantities at periodic intervals through a ‘daily cost averaging’. Under the plan a customer would pay a fixed sum of money on a monthly basis for a fixed period of time to Reliance Money Precious Metals Private Limited for purchasing gold. The customer receives credit for accumulations of gold purchased by RMPM at periodic intervals through a “daily averaging methodology”. According to the information on the website, My Gold Plan is neither a financial product nor a deposit but a method of purchasing gold through periodic accumulations.
My Gold Plan backed by physical gold
According to Reliance Money, the plan is 100 percent backed by physical gold which is held with the vaulting agency Lemuir Secure Logistics Pvt. Ltd. and is controlled by an independent trustee in order to offer maximum security and safety. Lemuir Secure Logistics claims to be the largest logistics service provider for bullion import handling and clearance, vaulting and distribution across India with a network currently spanning over 26 cities in India. IDBI Trusteeship Services Limited (ITSL) acts as trustee for My Gold Plan by Reliance Money.
According to Reliance Money’s website, My Gold Plan is available at a minimum subscription of Rs. 1,000 at the time of application (the minimum contribution amounts thereafter are multiples of Rs. 100/-) and can be subscribed for a tenure ranging from one to 15 years with intervals of 1 year. The customer cannot change the monthly subscription amount selected at the time of registration.
The daily average pricing methodology splits the monthly subscription into equal parts and allots gold grams over 20 successive business days.
According to Vikrant Gugnani, chief executive of broking and distribution business at Reliance Capital, cited by Business Standard, subscribers of My Gold Plan have two redemption options: redemption as gold coins or as jewellery at designated outlets. Fulfillment of gold coins shall be in the following denominations only: 0.5, 1, 2, 5, 8, 10, 20, 50, 100 grams.
There is a minimum lock-in period of six months from the date of initial subscription, during which redemption of gold is not permitted.
An 1.5% administrative charge shall be levied on every gold grams allotment by effecting a mark-up of 1.5% on the daily gold price. The safe keeping charges for the Reliance My Gold Plan amount to 0.5% per year on the total subscription amount.
In case of pre-mature fulfillment after the lock-in period but prior to the expiration of 1 year, a pre-mature termination fee of 2.5% is charged on the cumulative subscription amount paid by the customer.