Gold Monetisation Scheme

26-03-2025

05:58 AM

1 min read

Gold Monetisation Scheme Latest News

The Government of India has discontinued Medium-Term and Long-Term Government Deposits (MLTGD) under the Gold Monetisation Scheme (GMS) from March 26, 2025.

What is the Gold Monetisation Scheme?

Launched: November 2015, as an improved version of the existing Gold Deposit Scheme (GDS) and Gold Metal Loan (GML) Scheme.
Allows individuals, institutions, and even government entities to deposit idle gold in banks and earn interest instead of storing it in lockers.
Depositors can redeem the gold deposit in cash, gold bars, or coins upon maturity, but not in the same form (jewellery, bars, or coins).
Objective:
- To mobilize idle gold held by households and institutions.
- To bring gold into the formal economy and reduce gold imports, thereby helping reduce the Current Account Deficit (CAD).

Types of Gold Deposits under GMS

Type of Deposit	Tenure	Purpose & Redemption
Short-Term Gold Deposit (STGD)	1-3 years	Banks use these deposits for domestic needs and lending. Redemption can be in gold or cash.
Medium-Term Gold Deposit (MTGD)	5-7 years	Utilised by the government and RBI for gold reserves. Redemption only in cash.
Long-Term Gold Deposit (LTGD)	7-12 years	Used for monetary policy and reserves. Redemption only in cash.

Other Gold-Related Schemes

Sovereign Gold Bond (SGB) Scheme: Discontinued recently along with medium- and long-term GMS deposits.
- Gold bonds were issued in denominations of 5g, 10g, 50g, and 100g.
- Aimed to reduce demand for physical gold.
Indian Gold Coin Initiative: Launched alongside GMS and SGB in 2015.
- First-ever national gold coin with Ashoka Chakra emblem.

Gold Monetisation Scheme FAQs

Q1. What is the Gold Monetisation Scheme (GMS)?

Ans. The Gold Monetisation Scheme (GMS) was launched in 2015 by the Government of India to mobilize idle gold lying with households and institutions and put it to productive use.

Q2. Who can deposit gold under this scheme?

Ans. Individuals, HUFs (Hindu Undivided Families), trusts, and institutions like temples and organizations can deposit gold under the scheme.

Q3. Is the interest earned under GMS taxable?

Ans. No, the interest and capital gains are exempt from income tax, wealth tax, and capital gains tax.

Q4. Can the depositor withdraw gold before maturity?

Ans. Premature withdrawal is allowed, but it may attract penalties or reduced interest.

Source: IE