Centre Scraps Gold Monetisation Scheme, Retains Short-Term Deposits

The government announced on Tuesday that the Medium-Term and Long-Term Government Deposit (MLTGD) products under the Gold Monetisation Scheme (GMS) would be withdrawn from March 26, 2025.

Clarifying in an official statement, the Ministry of Finance said while the banks will no longer be taking deposits under these two segments after the deadline date, they can still extend Short-Term Gold Deposits (1-3 years) under the scheme.

As of November 2024, around 31,164 kilograms of gold have been mobilised through the GMS.

"Based on an assessment of the Gold Monetisation Scheme's (GMS) performance and changing market dynamics, it has been decided to discontinue the Medium-Term and Long-Term Government Deposit (MLTGD) components of the scheme from March 26, 2025," the ministry said.

Accordingly, as from the date specified above, no gold deposits will be received under the MLTGD regime at Collection and Purity Testing Centres (CPTCs) that are designated, GMS Mobilisation, Collection and Testing Agents (GMCTAs), or even designated bank branches.

Nevertheless, the ministry clarified that ongoing MLTGD deposits will not be affected and shall continue as of now in line with prevailing GMS guidelines up to maturity.

The Gold Monetisation Scheme was first introduced on September 15, 2015, with the aim of cutting India's reliance on gold imports and promoting the productive utilization of gold held by individuals and institutions.

Short-Term Bank Deposits (STBD) under GMS, however, will continue to be at the option of individual banks based on their commercial viability.

"The Reserve Bank of India will issue further instructions on this," the government further said.

Initially, the GMS was organized into three groups: Short-Term Bank Deposits (1-3 years), Medium-Term Government Deposits (5-7 years), and Long-Term Government Deposits (12-15 years).

Gold remains a favorite safe-haven investment, especially when there is economic and geopolitical risk. In 2025 alone, it has hit record levels 16 times, breaking above the $3,000 per ounce mark on four occasions.