{"id":45577,"date":"2025-03-30T07:49:06","date_gmt":"2025-03-30T02:19:06","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=45577"},"modified":"2025-05-06T21:34:15","modified_gmt":"2025-05-06T16:04:15","slug":"govt-scraps-gold-monetisation-scheme","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/govt-scraps-gold-monetisation-scheme\/","title":{"rendered":"Govt Scraps Gold Monetisation Scheme | RBI Clarifies Impact on Deposits"},"content":{"rendered":"<h2>What\u2019s in Today\u2019s Article?<\/h2>\n<ul>\n<li>Gold Monetisation Scheme Latest News<\/li>\n<li>Gold Monetisation Scheme (GMS): An Overview<\/li>\n<li>Government and RBI on Gold Monetisation Scheme Closure<\/li>\n<li>Gold Mobilised Under the Gold Monetisation Scheme<\/li>\n<li>Status of Other Gold Schemes in India<\/li>\n<li>Gold Monetisation Scheme FAQ\u2019s<\/li>\n<\/ul>\n<h2>Gold Monetisation Scheme Latest News<\/h2>\n<ul>\n<li>The government has discontinued the Gold Monetisation Scheme\u2019s medium- and long-term deposits from March 26, citing market conditions and scheme performance.\u00a0<\/li>\n<li>However, short-term deposits will continue at the discretion of banks based on commercial viability.<\/li>\n<\/ul>\n<h2>Gold Monetisation Scheme (GMS): An Overview<\/h2>\n<ul>\n<li>Introduced in November 2015, the GMS aimed to make idle gold productive by allowing individuals and institutions to sell or deposit gold with banks.\u00a0<\/li>\n<li>The goal was to integrate gold into the formal economy, reduce gold imports, and lower the current account deficit.\u00a0<\/li>\n<li>It was a revamped version of the earlier Gold Deposit Scheme.<\/li>\n<\/ul>\n<h3>Key Features<\/h3>\n<ul>\n<li>Allowed deposits from households, trusts, and institutions.<\/li>\n<li>Minimum deposit: 10 gm of raw gold (bars, coins, jewellery without stones\/metals).<\/li>\n<li>No maximum deposit limit.<\/li>\n<\/ul>\n<h3>Three Deposit Categories<\/h3>\n<ul>\n<li><strong>Short-term bank deposits (1-3 years)<\/strong> \u2013 Managed by banks.<\/li>\n<li><strong>Medium-term government deposits (5-7 years)<\/strong> \u2013 Managed by the government.<\/li>\n<li><strong>Long-term government deposits (12-15 years)<\/strong> \u2013 Managed by the government.<\/li>\n<\/ul>\n<h3>Gold Monetisation Scheme: Interest Rates<\/h3>\n<ul>\n<li><strong>Short-Term Deposits<\/strong>\n<ul>\n<li>Interest rates were determined by banks based on international lease rates, market conditions, and other costs.<\/li>\n<li>Interest was borne by the banks.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Medium- and Long-Term Deposits<\/strong>\n<ul>\n<li>Interest rates were set by the government in consultation with the RBI.<\/li>\n<li>Interest was paid by the Central government.<\/li>\n<li><strong>Medium-term deposits (5-7 years):<\/strong> 2.25% per annum<\/li>\n<li><strong>Long-term deposits (12-15 years):<\/strong> 2.5% per annum<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Government and RBI on Gold Monetisation Scheme Closure<\/h2>\n<ul>\n<li><strong>Discontinuation of the Scheme<\/strong>\n<ul>\n<li>The <strong>Ministry of Finance<\/strong> announced the discontinuation of Medium- and Long-Term Government Deposits (MLTGD) under the GMS from March 26, 2025.<\/li>\n<li>Only <strong>short-term deposits<\/strong> managed by banks will continue.<\/li>\n<li>From <strong>March 26, 2025<\/strong>, no new deposits will be accepted at collection centers, testing agents, or designated bank branches.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Impact on Existing Deposits<\/strong>\n<ul>\n<li>Existing medium- and long-term deposits remain unaffected and will continue until maturity unless withdrawn prematurely.<\/li>\n<li>The RBI has not issued a separate release but has updated the scheme details on its website.<\/li>\n<\/ul>\n<\/li>\n<li><strong>RBI Guidelines<\/strong>\n<ul>\n<li>The RBI will issue detailed guidelines regarding the scheme\u2019s closure.<\/li>\n<li>It confirmed that the renewal of medium- and long-term deposits has been discontinued from March 26, 2025.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Gold Mobilised Under the Gold Monetisation Scheme<\/h2>\n<ul>\n<li><strong>Total Gold Collected<\/strong> &#8211; As of November 2024, a total of 31,164 kg of gold was mobilised under the scheme.<\/li>\n<li><strong>Breakdown by Deposit Type<\/strong>\n<ul>\n<li>Short-term deposits: 7,509 kg<\/li>\n<li>Medium-term deposits: 9,728 kg<\/li>\n<li>Long-term deposits: 13,926 kg<\/li>\n<\/ul>\n<\/li>\n<li><strong>Depositor Participation<\/strong> &#8211; Total depositors: 5,693<\/li>\n<li><strong>Gold Collection from Different Sources<\/strong>\n<ul>\n<li>From individuals\/HUFs (FY 2016-17 &amp; 2017-18): 1,134 kg<\/li>\n<li>From temples, trusts, mutual funds, gold ETFs, and firms: 10,872 kg<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Status of Other Gold Schemes in India<\/h2>\n<ul>\n<li><strong>Gold Monetisation Scheme (GMS) Closure<\/strong>\n<ul>\n<li>The GMS is the second gold-related scheme to be discontinued after the halt on sovereign gold bonds.<\/li>\n<li>The decision comes amid a sharp rise in gold prices, which increased by 41.5% from \u20b963,920 per 10 gm (Jan 1, 2024) to \u20b990,450 per 10 gm (March 25, 2025).<\/li>\n<\/ul>\n<\/li>\n<li><strong>Sovereign Gold Bonds (SGB) Discontinued<\/strong>\n<ul>\n<li>The government stopped fresh issuance of sovereign gold bonds and did not announce any new tranche in Budget 2025-26.<\/li>\n<li>Reason: SGBs were considered a high-cost borrowing for the government.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Government\u2019s Gold Strategy<\/strong>\n<ul>\n<li>Officials had earlier stated that SGBs aimed to boost gold investment, but the cut in gold import duty (Budget 2024-25) already aligned with this goal and helped increase demand.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Gold Monetisation Scheme FAQs<\/h2>\n<p><strong>Q1.<\/strong> What is the Gold Monetisation Scheme?<\/p>\n<p><strong>Ans.<\/strong> A scheme launched in 2015 to allow individuals and institutions to deposit gold with banks for interest.<\/p>\n<p><strong>Q2.<\/strong> Why was the Gold Monetisation Scheme discontinued?<\/p>\n<p><strong>Ans.<\/strong> The government cited market conditions and low participation, leading to the scheme\u2019s closure from March 26, 2025.<\/p>\n<p><strong>Q3.<\/strong> Will existing gold deposits be affected?<\/p>\n<p><strong>Ans.<\/strong> No, existing medium- and long-term deposits will remain valid until maturity unless withdrawn prematurely.<\/p>\n<p><strong>Q4.<\/strong> What happens to short-term deposits?<\/p>\n<p><strong>Ans.<\/strong> Short-term gold deposits will continue based on banks\u2019 commercial viability and interest rates.<\/p>\n<p><strong>Q5.<\/strong> How much gold was mobilized under the scheme?<\/p>\n<p><strong>Ans.<\/strong> As of November 2024, 31,164 kg of gold was mobilized through various deposit categories.<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/indianexpress.com\/article\/business\/govt-ends-gold-monetisation-scheme-rbi-status-existing-deposits-9906940\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India to end Gold Monetisation Scheme\u2019s medium &#038; long-term deposits from March 2025, impacting investors &#038; banks. Short-term deposits remain.<\/p>\n","protected":false},"author":5,"featured_media":45578,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-45577","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/45577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=45577"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/45577\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/45578"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=45577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=45577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=45577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}