Govt Ends Gold Monetisation Scheme But Short Term Deposits To Continue – Trak.in
The Union Finance Ministry has announced the discontinuation of the medium and long-term government deposit (MLTGD) components of the Gold Monetisation Scheme (GMS) from March 26, 2025. This move follows a detailed review of the scheme’s performance and changing market conditions.
Background of the Gold Monetisation Scheme
Launched on September 15, 2015, the Gold Monetisation Scheme was introduced to reduce India’s reliance on gold imports and encourage households and institutions to put their gold holdings to productive use. The scheme initially comprised three components:
- Short-Term Bank Deposits (STBD): Ranging from 1 to 3 years
- Medium-Term Government Deposits (MTGD): Lasting 5 to 7 years
- Long-Term Government Deposits (LTGD): With durations between 12 to 15 years
Impact of the Discontinuation
Effective March 26, medium-term and long-term deposits will no longer be accepted at designated Collection and Purity Testing Centres (CPTCs), Gold Monetisation Scheme Collection & Testing Agents (GMCTAs), or bank branches. However, existing deposits under these categories will remain valid until maturity, following the Reserve Bank of India’s (RBI) guidelines.
Continuation of Short-Term Deposits
The short-term bank deposit (STBD) option will continue under the GMS. However, its availability will be subject to the commercial viability of individual banks. The RBI is expected to issue further detailed guidelines to clarify the revised terms and operational aspects of the scheme.
Government’s Strategic Shift
This policy shift reflects the government’s efforts to streamline the Gold Monetisation Scheme to align with current financial market conditions. By focusing on short-term deposits, the government aims to provide greater flexibility and optimize the utilization of gold assets.
Conclusion
While the medium and long-term components are discontinued, the continued availability of short-term deposits ensures that gold holders still have a viable investment option. Stakeholders are advised to stay updated on further announcements from the RBI regarding the implementation of these changes.
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