The Gold Monetisation Scheme (GMS) is a scheme announced by the Government of India via Office Memorandum F.No.20/6/2015-FT dated September 15, 2015, and launched on November 5, 2015. Its primary objective was to mobilize the vast amount of idle gold held by households and institutions for productive use and to reduce the country's reliance on gold imports, which contributed to the trade deficit. The GMS revamped and consolidated the previous 'Gold Deposit Scheme' and the 'Gold Metal Loan' scheme.
The scheme is administered by the Reserve Bank of India (RBI) and works by allowing individuals to deposit raw gold (bars, coins, or jewelry excluding stones) with designated banks. The minimum deposit was reduced to 10 grams in a February 2021 amendment. The gold is tested at Collection and Purity Testing Centres (CPTC) certified by the Bureau of Indian Standards (BIS). The scheme originally offered three deposit options: Short-Term Bank Deposits (STBD) (1-3 years), Medium-Term Government Deposits (MTGD) (5-7 years), and Long-Term Government Deposits (LTGD) (12-15 years). Depositors earn interest, and the principal repayment at maturity can be in gold or the INR equivalent of the gold's value. The mobilized gold is then used by banks to provide Gold Metal Loans to jewelers.
The GMS is conceptually linked to other government initiatives like the Sovereign Gold Bond Scheme and the Indian Gold Coin. A major change occurred when the Ministry of Finance announced the discontinuation of the MTGD and LTGD components effective March 26, 2025, though existing deposits will continue until maturity. The STBD component may continue at the discretion of individual banks.