Gold Monetisation Scheme: While the government has decided to discontinue the Gold Monetisation Scheme, existing gold deposits remain safe, and investors have multiple other avenues to park their wealth in gold-backed instruments.
Gold Monetisation Scheme: In a major policy shift, the central government has decided to discontinue the Gold Monetisation Scheme (GMS) starting Wednesday (March 26), citing evolving market conditions. However, banks will still be allowed to offer short-term gold deposit schemes ranging from one to three years, according to a statement issued by the finance ministry. Since its launch, the scheme has mobilised approximately 31,164 kilograms of gold till November 2024, it added.
The Gold Monetisation Scheme was announced on September 15, 2015, with the objective to reduce the country’s reliance on the import of gold in the long run and mobilise gold held by households and institutions in the country to facilitate its use for productive purposes. “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.
The Gold Monetisation Scheme is comprised of 3 components:
Short-term Term Bank Deposit (1-3 years)
Medium Term Government Deposit (5-7 years)
Long-Term Government Deposit (12-15 years)
The Short-Term Bank Deposits (STBD) offered by the banks under GMS shall continue at the discretion of the individual banks based on the commercial viability as assessed by them. The detailed guidelines of the Reserve Bank in this regard shall follow, the ministry added.
What happens to depositors’ gold now?
If you have deposited your gold under this scheme, there is no need to panic. The government has assured that existing deposits will be honoured as per the agreed terms and conditions. Here’s what depositors need to know:
Maturity of deposits: If your gold deposit has matured, you can redeem it as per the original terms, either in gold or cash, depending on your chosen option.
Ongoing deposits: Those with long-term deposits need not worry, as the government and banks will continue to service the interest and facilitate withdrawals as per the contract.
Premature withdrawal: If you wish to withdraw your gold before maturity, the existing premature withdrawal rules will apply, which may involve penalties or deductions.
Gold deposits under GMS to halt from March 26
The ministry further said that any gold deposits tendered at the designated Collection and Purity Testing Centre (CPTC) or GMS Mobilisation, Collection & Testing Agent (GMCTA) or the designated bank branches under the MLTGD components of GMS shall not be accepted with effect from March 26, 2025.
However, the existing deposits under MLTGD shall continue till redemption as per extant guidelines of GMS. Of the total 31,164 kgs of gold till November 2024, Short term Gold Deposit accounted for 7,509 kg, Medium Term Gold Deposit (9,728 kg), and Long Term Gold Deposit (13,926 kg). There were about 5,693 depositors who participated in GMS. Gold prices have increased by Rs 26,530 or 41.5 per cent to Rs 90,450 per 10 grams (as of March 25, 2025) from Rs 63,920 per 10 grams on January 1, 2024.
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