Government Ends Gold Monetisation Scheme's Long-Term Deposits

Synopsis

The government has announced the discontinuation of the medium-term and long-term components of the Gold Monetisation Scheme (GMS) effective March 26. However, short-term gold deposit schemes will continue to be offered by banks. The GMS aims to reduce reliance on gold imports and mobilize gold for productive uses.

Key Takeaways

Medium and Long-Term Deposits of GMS are terminated.
Short-Term Deposits (1-3 years) will continue.
Over 31,164 kilograms of gold mobilized so far.
Current deposits remain until redemption.
GMS was launched to reduce gold imports.

New Delhi, March 25 (NationPress) The government has declared the termination of the medium-term and long-term components of the Gold Monetisation Scheme (GMS), starting March 26. The Ministry of Finance stated that banks can still offer their short-term gold deposit schemes (1-3 years).

As of November 2024, approximately 31,164 kilograms of gold have been mobilized under the GMS.

“After reviewing the performance of the Gold Monetisation Scheme (GMS) and the changing market conditions, the decision has been made to end the Medium-Term and Long-Term Government Deposit (MLTGD) components of the GMS effective March 26, 2025,” the ministry announced.

Consequently, any gold deposits submitted at the designated Collection and Purity Testing Centre (CPTC) or GMS Mobilisation, Collection and Testing Agent (GMCTA) or the respective bank branches under these components will not be accepted starting from March 26, 2025.

“Nevertheless, current deposits under MLTGD will remain active until redemption as per the existing GMS guidelines,” it further stated.

The Gold Monetisation Scheme was introduced on September 15, 2015, aiming to decrease the nation's dependency on gold imports long-term, while mobilizing gold possessed by households and institutions for productive use.

Additionally, the Short-Term Bank Deposits (STBD) provided by banks under the GMS will continue at the banks' discretion, based on their commercial viability assessments.

“Detailed guidelines from the Reserve Bank regarding this will follow,” said the government.

The GMS consists of three components: Short-Term Bank Deposit (1-3 years); Medium-Term Government Deposit (5-7 years); and Long-Term Government Deposit (12-15 years).

Gold is often viewed as a safe-haven asset, gaining popularity during periods of geopolitical and economic uncertainty. The metal has already achieved 16 record highs in 2025, exceeding the $3,000 per ounce mark on four separate occasions.