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The government of India has decided to close and discontinue the Gold Monetisation Scheme (GMS) from today. This action has been taken in view of the evolving market conditions, the finance ministry said. However, the ministry has clarified that banks will still continue to offer short-term gold deposit schemes, which range from 1 to 3 years.
This action reflects the government’s assessment of current market dynamics and aims to address changing conditions. The discontinuation of GMS will definitely impact those who use the scheme for monetizing their gold holdings. Till November 2024, approximately 31,164 kilograms of gold have been mobilised under GMS.
Gold Monetisation Scheme’s Background
The scheme was announced on 15th September 2015 to encourage households and institutions across India to deposit their unused gold with banks. The scheme aimed to unlock the potential of this vast gold reserve and promote gold’s use for productive purposes, while also decreasing the nation’s dependency on importing gold, which has been a significant drain on the country’s foreign exchange reserves.
What Is Gold Monetisation Scheme Offers?
Here are the components of the GMS in pointer format:
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Short-Term Bank Deposit: 1-3 years
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Medium-Term Government Deposit: 5-7 years
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Long-Term Government Deposit: 12-15 years
“Based on the examination of the performance of the Gold Monetisation Scheme (GMS) and evolving market conditions, it has been decided to discontinue the Medium Term and Long Term Government Deposit (MLTGD) components of the GMS w.e.f. March 26, 2025,” the ministry said.
Scheme’s Performance:
Since its inception, the Gold Monetisation Scheme has garnered attention from individuals and institutions eager to monetize their gold holdings. By offering interest on gold deposits, the scheme allowed participants to earn returns while contributing to the nation’s economic growth. As of November 2024, the scheme had mobilised about 31,164 kilograms of gold, highlighting the level of public participation.
The Short-Term Bank Deposit
The Short-Term Bank Deposits (STBD) under the Gold Monetisation Scheme (GMS) will continue at the discretion of individual banks, based on their commercial viability. Detailed guidelines from the Reserve Bank of India will follow.
However, starting March 26, 2025, gold deposits tendered at the designated Collection and Purity Testing Centres (CPTC), GMS Mobilisation, Collection & Testing Agents (GMCTA), or designated bank branches under the Medium and Long-Term Government Deposit (MLTGD) components will no longer be accepted. Existing MLTGD deposits will continue until redemption according to the current GMS guidelines.
As of November 2024, a total of 31,164 kg of gold has been mobilised under the scheme, with 7,509 kg in Short-Term Gold Deposits, 9,728 kg in Medium-Term Gold Deposits, and 13,926 kg in Long-Term Gold Deposits. Approximately 5,693 depositors participated in the GMS. Gold prices have increased by Rs 26,530 (41.5%) to Rs 90,450 per 10 grams as of March 25, 2025.
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