The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, MARCH 25, 2025
In a significant policy shift, the Union government on Tuesday announced the discontinuation of the Medium-Term and Long-Term Government Deposit (MLTGD) components of the Gold Monetisation Scheme (GMS) with effect from March 26, 2025. However, banks will continue offering Short-Term Bank Deposits (STBD) for gold, ranging from one to three years, at their discretion.
The Ministry of Finance, in an official statement, stated that the decision was taken after reviewing the performance of the scheme and considering evolving market conditions. “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.
With this decision, gold deposits tendered at designated Collection and Purity Testing Centres (CPTCs), GMS Mobilisation, Collection and Testing Agents (GMCTAs), or designated bank branches under these components will no longer be accepted after the effective date. However, existing deposits under MLTGD will remain valid until their respective redemption periods, following the current guidelines of the GMS.
Launched on September 15, 2015, the Gold Monetisation Scheme aimed to reduce India’s dependence on gold imports by encouraging households and institutions to deposit idle gold for productive use. Since its inception, approximately 31,164 kilograms of gold have been mobilised under the scheme until November 2024.
The GMS originally comprised three components: Short-Term Bank Deposits (STBD) – 1 to 3 years (to be continued based on banks’ commercial assessment); Medium-Term Government Deposits (MTGD) – 5 to 7 years (discontinued); and Long-Term Government Deposits (LTGD) – 12 to 15 years (discontinued).
The Reserve Bank of India is expected to issue detailed guidelines regarding the continuation of STBDs.
This policy shift comes at a time when gold prices have been surging amid global economic uncertainties. The precious metal has already recorded 16 all-time highs in 2025, crossing the $3,000 per ounce mark on four occasions, reinforcing its status as a preferred safe-haven asset.
