Current Context: The Government of India has discontinued the medium- and long-term components of the Gold Monetisation Scheme (GMS), effective March 26, 2025.

Gold Monetisation Scheme (GMS)

• Launch: November 2015.
• Objective: Mobilise idle gold held by households and institutions to reduce gold imports and the current account deficit.

Components of GMS

• Short-term Bank Deposits (1-3 years):
  • Interest rates set by banks based on market conditions.
  • This component will remain active.
• Medium-term Government Deposits (5-7 years):Fixed interest rate: 2.25%.
  • Long-term Government Deposits (12-15 years):Fixed interest rate: 2.5%.
• Reasons for Discontinuation:
  • Evolving Market Conditions: Rising gold prices prompted reassessment.
  • Scheme Performance: Lower-than-expected participation in medium- and long-term deposits.
  • Focus on Refinement: Align policies with changing economic needs.