The government has decided to discontinue the Gold Monetisation Scheme (GMS) starting from Wednesday in view of the evolving market conditions, the finance ministry said.
However, the banks may continue their short term gold deposit schemes (1-3 years), the ministry said in the statement on Tuesday.
Till November 2024, approximately 31,164 kilograms of gold have been mobilised under GMS.
The Gold Monetisation Scheme was announced on September 15, 2015, with the objective to reduce country's reliance on the import of gold in the long run and mobilise gold held by households and institutions in the country to facilitate its use for productive purposes.
The GMS is comprised of 3 components -- Short Term Bank Deposit (1-3 years); Medium Term Government Deposit (5-7 years), and Long-Term Government Deposit (12-15 years).
"Based on the examination of the performance of the Gold Monetisation Scheme (GMS) and evolving market conditions, it has been decided to discontinue the Medium Term and Long Term Government Deposit (MLTGD) components of the GMS w.e.f. March 26, 2025," the ministry said.
The Short-Term Bank Deposits (STBD) offered by the banks under GMS shall continue at the discretion of the individual banks based on the commercial viability as assessed by them.
The detailed guidelines of Reserve Bank in this regard shall follow.
The ministry further said that any gold deposits tendered at the designated Collection and Purity Testing Centre (CPTC) or GMS Mobilisation, Collection & Testing Agent (GMCTA) or the designated bank branches under the MLTGD components of GMS shall not be accepted with effect from March 26, 2025.
However, the existing deposits under MLTGD shall continue till redemption as per extant guidelines of GMS.
Of the total 31,164 kgs of gold till November 2024, Short term Gold Deposit accounted for 7,509 kg, Medium Term Gold Deposit (9,728 kg), and Long Term Gold Deposit (13,926 kg).
There were about 5,693 depositors who participated in GMS.
Gold prices have increased by Rs 26,530 or 41.5 per cent to Rs 90,450 per 10 grams (as of March 25, 2025) from Rs 63,920 per 10 grams on January 1, 2024.
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