The government has announced the discontinuation of the Gold Monetisation Scheme starting Wednesday, citing evolving market conditions, according to the finance ministry. Banks, however, may continue offering short-term gold deposit schemes (1-3 years), as stated by the ministry on Tuesday.
Since its launch in September 2015, the GMS has mobilised around 31,164 kilograms of gold as of November 2024. The scheme was introduced to reduce the country's reliance on gold imports and to encourage households and institutions to utilise their gold for productive purposes.
The GMS consisted of three components: short-term bank deposits (1-3 years), medium-term government deposits (5-7 years), and long-term government deposits (12-15 years).
The finance ministry, after reviewing the scheme's performance and market trends, decided to discontinue the Medium-Term and Long-Term Government Deposit components effective March 26, 2025. Banks will still have the discretion to offer short-term deposits based on their commercial feasibility, with further guidelines from the Reserve Bank expected.
The ministry further said that any gold deposits tendered at the designated Collection and Purity Testing Centre or GMS Mobilisation, Collection & Testing Agent 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 kg of gold till November 2024, short-term gold deposits accounted for 7,509 kg, medium-term gold deposits for 9,728 kg, and long-term gold deposits for 13,926 kg.
There were about 5,693 depositors who participated in GMS. Gold prices have increased by Rs 26,530, or 41.5%, to Rs 90,450 per 10 grams (as of March 25, 2025) from Rs 63,920 per 10 grams on Jan. 1, 2024.
(With PTI Inputs)
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