Description

The Government of India has officially decided to discontinue the medium-term and long-term deposit options under the Gold Monetisation Scheme (GMS), effective from March 26, 2025. This move follows an evaluation of the scheme’s performance amid the sharp rise in gold prices. According to the Ministry of Finance, banks will now only offer short-term deposit options under the scheme, depending on their discretion.

Overview Of Gold Monetisation Scheme (GMS)

Introduced in November 2015, the Gold Monetisation Scheme was designed to channel idle gold from households and institutions into the financial system. The primary objectives were to reduce dependence on gold imports and manage the current account deficit. Under this scheme, gold holders could deposit their idle gold with banks, allowing it to contribute to the economy more productively.

Structure Of GMS

The scheme originally consisted of three categories:

• Short-Term Bank Deposits (STBD) – Tenure of 1 to 3 years.

• Medium-Term Government Deposits (MTGD) – Tenure of 5 to 7 years.

• Long-Term Government Deposits (LTGD) – Tenure of 12 to 15 years.

Depositors could invest a minimum of 10 grams of gold, without any upper limit.

Interest Rates Applicable

Short-term deposit interest rates were set by individual banks based on prevailing market dynamics. In contrast, interest rates for the medium- and long-term deposits were fixed by the Government of India in coordination with the Reserve Bank of India (RBI). Medium-term deposits carried an annual interest of 2.25%, while long-term deposits earned 2.5%.

Achievements And Participation

By November 2024, the scheme had mobilized approximately 31,164 kilograms of gold. Short-term deposits contributed 7,509 kg, medium-term deposits totaled 9,728 kg, and long-term deposits accounted for 13,926 kg. Around 5,693 depositors took advantage of the scheme, helping turn idle gold into a productive financial asset.

Plan Was Changed

The Ministry of Finance highlighted that changes in the gold market and the performance of the scheme prompted this shift. The significant surge in gold prices influenced the government's decision to re-evaluate gold-related financial products, similar to previous reviews of sovereign gold bonds.

Way Forward For Gold-Linked Deposits

With medium- and long-term deposits now discontinued, attention will shift entirely to short-term gold deposits. The RBI is expected to issue new operational guidelines for banks regarding these deposits. The government has also indicated its commitment to restructuring and improving gold-related financial instruments to better suit evolving economic conditions.

Welcome to Notopedia.com, your comprehensive and free online education resource that covers a vast array of competitive exams and government job opportunities in India. We understand the importance of excelling in sarkari exams, such as UPSC, IBPS, and SSC CGL, SSC CHSL which serve as gateways to esteemed government positions. Our platform offers detailed insights into exam patterns, syllabus, and previous year question papers for various exams, including NEET, JEE, CAT, CLAT, GATE and more. Whether you're preparing for banking exams like IBPS, SBI, railway recruitment or railway exams like RRB, or seeking admission to top-notch MBA and law programs, Notopedia provides you with a wealth of free study materials, mock tests, online test series and expert guidance. Stay up-to-date with the latest exam dates, results, and admit cards for exams like JEE Main, UGC NET, and CET. As you embark on your educational journey, make Notopedia your go-to destination for free mock tests, comprehensive resources, and the latest updates on sarkari results, government job vacancies, and competitive exams. Empower your learning with Notopedia and achieve your academic and career aspirations with confidence.

For more Updates and Information - Visit Notopedia's Bulletin Board

For Latest Sarkari Jobs - Visit Notopedia's Sarkari Jobs Section

For access to more than 20,000 Colleges - Visit Notopedia's College Section

For School Studies and Exams Preparation across 14 Boards - Visit Notopedia's School Section

For Comprehensive Preparation of Sarkari Job Exams - Visit Notopedia's Sarkari Exams Section

For Comprehensive Preparation of Competitive Exams - Visit Notopedia's College Entrance Exams Section