Gold Monetization Scheme

The Gold Monetization Scheme (GMS), which modifies the existing "Gold Deposit Scheme (GDS)" and Gold Metal Loan Scheme (GML), is intended to mobilise gold held by the country's households and institutions and facilitate its use for productive purposes, as well as to reduce the country's reliance on gold imports in the long run.
The Gold Monetisation Scheme allows gold depositors to earn interest on their bank deposit accounts. When gold is deposited into an account, it begins earning interest. Gold can be in any form, such as bullion or jewellery.

All Scheduled Commercial Banks, excluding RRBs are eligible to implement the Scheme.

Individuals, HUFs, Proprietorship & Partnership firms, Trusts, including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations, Companies, charitable institutions, Central Government, State Government, or any other entity owned by the Central Government or State Government are eligible to make deposits under the scheme. Joint deposits of two or more eligible depositors are also permitted under the scheme, and the deposit will be credited to the joint deposit account opened in their names. These gold deposits will be subject to the existing rules governing the joint operation of bank deposit accounts, including nominations.

The minimum quantity of deposits is pegged at 10 grams to encourage even small deposits.

Yes, the Principal is denominated in Gold (Grams) and Interest is denominated in INR. The Interest is paid in INR upon Maturity.

For MTGD the interest rate is 2.25% p.a.
For LTGD the interest rate is 2.50% p.a.

When a customer brings in gold (jewellery) to the bank, it will first be tested for purity and after the consent of the customer, it will be melted. A certificate by the collection centre will be given stating the amount and purity of gold which will have to be produced in the bank for opening the gold deposit account. The quantity of gold will be credited into the customer's account.

The jewellery is melted and converted into 995 fineness bars. The weight in 995 fineness is considered as the final quantity to be credited to the customer gold deposit account.

The main objectives of gold monetization scheme are:

• To mobilize gold held by households and institutions in the country.
• Make gold available on loan from banks to jewellery businesses.
• To reduce dependence on imports.

Central government launched the scheme issued vide office Memorandum F.No.20/6/2015-FT dated September 15, 2015.