The Gold Monetization Scheme (GMS) and Market conditions and project

The Gold Monetization Scheme (GMS), launched in 2015, aims to reduce the country's dependence on gold imports while also mobilizing idle gold reserves and facilitating their productive use. It allows individuals and institutions to earn interest on their gold deposits, and converts gold into a financial asset.

Gold Monetization Scheme Lanched Details

The Gold Monetization Scheme is an initiative of the Government of India that aims to activate gold lying dormant in households and institutions in the country and use it for productive purposes. The scheme was first launched in November 2015.  The design and operation of the scheme falls under the Ministry of Finance. Therefore, the Minister in charge of the Gold Monetization Scheme is the Finance Minister of India. As of April 2025, the Finance Minister is Nirmala Sitharaman.

Market conditions and project performance assessments

·     Notably, in March 2025, the Finance Ministry finalized the medium and long-term deposit options (5-7 years and 12-15 years) of the Gold Bullion Scheme, after assessing the market conditions and the performance of the scheme. The notification in this regard was issued on March 26, 2025.

·   Under this scheme, gold can be deposited in banks and earn interest on it. There are options such as short-term deposits (1-3 years) and medium/long-term deposits (5-15 years), with interest rates of 2.25% and 2.5% respectively.

· Initially, the scheme did not provide sufficient incentives among the people and banks. As of December 2022, only 0.22% (about 22 tonnes) of India's private gold reserves were bullion under this scheme.

· Under this scheme, gold can be deposited in banks and earn interest on it. There are options such as short-term deposits (1-3 years) and medium/long-term deposits (5-15 years), with interest rates of 2.25% and 2.5% respectively.

Important : An eligible depositor can open a Gold Deposit Account with any of the designated banks after meeting the KYC norms. Generally, deposits under the scheme shall be made at the CPTC/GMS Mobilisation, Collection & Testing Agent (GMCTA) which would then test the purity of the customers’ gold in their presence and issue deposit receipts of the standard gold of 995 fineness to the depositor and also inform the customers’ respective bank about acceptance of deposit.

 The scheme primarily operates through three main systems:

•   Individual Depositors – Common citizens, households, and small investors who deposit their     idle  gold in banks.
• ·Institutions & Trusts – Temples, religious trusts, and other organizations that hold large   quantities of gold.
•  Banking & Financial System – Banks, Non-Banking Financial Companies (NBFCs), and the Reserve Bank of India (RBI) use this scheme to manage national gold reserves and reduce import dependency.

A total of 31,164 kg of gold has been monetized under the Gold Monetization Scheme till November 2024. However, specific information about how many people (individuals or institutions) have participated in this scheme is not generally disclosed. Also, from March 26, 2025, the medium and long-term deposit options of this scheme are being completed.

# Gold Monetization Scheme 

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