New Delhi, March 26: The Indian government has officially discontinued the Gold Monetisation Scheme (GMS) for medium and long-term deposits starting today. This decision comes after a comprehensive review of the scheme’s performance and prevailing market conditions, as per a statement issued by the Union Finance Ministry.
What Has Changed?
As of March 26, 2025:
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Medium-Term Government Deposits (MTGD) and Long-Term Government Deposits (LTGD) under the GMS will no longer be accepted at designated Collection and Purity Testing Centres (CPTCs) or authorised bank branches.
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Short-Term Bank Deposits (STBD) of up to 3 years will continue to be offered by banks at their discretion.
About the Gold Monetisation Scheme
Launched on September 15, 2015, the GMS aimed to:
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Mobilise idle gold lying in Indian households.
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Reduce dependency on gold imports, which significantly affect the country’s import bill and foreign exchange reserves.
Key Highlights of the Original Scheme:
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Citizens could deposit their gold in 3 categories:
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STBD: 1 to 3 years
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MTGD: 5 to 7 years
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LTGD: 12 to 15 years
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In return, depositors received gold bonds (5g, 10g, 50g, 100g denominations).
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Interest was paid based on the prevailing market price of gold at the time of deposit.
Why Was It Discontinued?
Despite noble intentions, the scheme saw limited public participation. Experts believe:
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Lack of awareness and trust in the system.
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Preference for physical possession of gold over financial instruments.
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Limited bank participation in medium and long-term schemes.
According to Rajeev Dutta, CEO of Capex Gold and Investments, while the government has withdrawn from MTGD and LTGD, STBD remains available, though subject to individual bank decisions.
What Happens to Existing Deposits?
Depositors need not worry. All existing investments under GMS are completely secure. Investors will:
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Continue receiving interest until bond maturity.
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Redeem bonds at maturity as per terms issued by the government.
Short-Term Option Still Alive
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STBDs remain valid with a maximum tenure of 3 years.
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Interest rates on STBDs are set by individual banks.
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Investors may still monetise idle gold, but only in the short-term format going forward.
Impact on Gold Imports and Economy
India’s annual gold consumption is around 800 tonnes, while domestic production is barely 1 tonne. GMS was envisioned as a tool to:
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Reduce gold imports.
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Secure gold savings.
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Offer returns to gold holders.
Despite limited success, the scheme helped lay the groundwork for future gold-based financial instruments.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
