What Was the Gold Monetisation Scheme?
Launched in November 2015, the Gold Monetisation Scheme (GMS) was aimed at mobilising idle household gold and integrating it into the formal banking system. The scheme allowed individuals, trusts, temples, and institutions to deposit gold bars, coins, and jewellery (excluding stones) and earn interest in return. GMS offered three deposit categories: Short-term (1–3 years), Medium-term (5–7 years), and Long-term (12–15 years), each with distinct interest rates and maturity conditions. Its key objective was to reduce India’s gold imports and help correct the current account deficit by tapping domestic reserves.
Why Is the Scheme Being Discontinued?
On March 26, 2025, the Government of India officially discontinued both the medium-term and long-term deposit options under the GMS. The Reserve Bank of India (RBI) clarified that existing deposits will be valid till maturity, but no new deposits will be accepted in these two categories. The decision was taken due to the scheme’s limited success and evolving market conditions. However, short-term deposits may continue at the discretion of individual banks, depending on market demand and internal policies.
Interest Rates and Deposit Statistics
Interest rates under GMS were 2.25% for medium-term and 2.5% for long-term deposits, while short-term deposits had variable rates set by banks. By November 2024, total gold mobilised under the scheme stood at 31,164 kg, across 5,693 depositors. Of this, 13,926 kg came from long-term, 9,728 kg from medium-term, and 7,509 kg from short-term deposits. Key contributors included individuals, Hindu Undivided Families (HUFs), temples, mutual funds, and charitable trusts.
Future of Gold Investment in India
Alongside GMS changes, Sovereign Gold Bonds (SGBs) were also discontinued in the Union Budget 2025–26, citing high administrative costs. The government is now exploring alternatives such as lowering import duties to control excessive demand. With gold prices surging 41.5% in 2024, reaching ₹90,450 per 10 grams by March 25, 2025, the focus may shift to digital or market-linked gold investment models to reduce reliance on physical assets and imports while improving investor flexibility.
STATIC GK SNAPSHOT
| Topic | Details |
| Scheme Name | Gold Monetisation Scheme (GMS) |
| Launched | November 2015 |
| Discontinued (MTGD & LTGD) | March 26, 2025 |
| Types of Deposits | Short-term, Medium-term, Long-term |
| Interest Rates | STBD: Bank-decided, MTGD: 2.25%, LTGD: 2.5% |
| Minimum Deposit | 10 grams of raw gold |
| Total Gold Mobilised (2024) | 31,164 kg |
| Major Contributors | Individuals, Temples, Trusts, HUFs |
| Sovereign Gold Bonds Status | Discontinued in Budget 2025–26 |
| Gold Price (March 2025) | ₹90,450 per 10 gm |
| Objective | Reduce gold imports and formalise gold savings in the economy |
