Central Government discontinues Gold Monetisation Scheme; banks may continue

The Central Government has decided to discontinue the Gold Monetisation Scheme (GMS) starting from Wednesday in view of the evolving market conditions, the Finance Ministry said.

However, the banks may continue their short-term gold deposit schemes (1-3 years), the ministry said in the statement late on Tuesday.

Till November 2024, approximately 31,164 kg of gold has been mobilised under the scheme.

The GMS was introduced on September 15, 2015, 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.

The GMS is comprised of 3 components — Short-Term Bank Deposit (1-3 years); Medium Term Government Deposit (5-7 years), and 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.

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 Reserve Bank of India in this regard shall follow.

The ministry further said 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 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.