Skip to main content

What is Gold Monetization Scheme?

Want your idle Gold Jewellery to earn some income? Gold Monetisation Scheme can make it possible.

Gold Monetisation Scheme (GMS)

Gold Monetization Scheme (GMS) was introduced by modifying the existing ‘Gold Deposit Scheme (GDS)’ and ‘Gold Metal Loan Scheme (GML)’, to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce the country’s reliance on the import of gold.

GMS provides an opportunity to the eligible customers to deposit their gold with the designated banks and earn interest on such deposits.

Providers and depositors of GMS

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

Resident Indians such as Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds / Exchange Traded Funds, Companies, charitable institutions, Central Government, State Government or any other entity owned by Central / State Government, are eligible to make a deposit either singly or jointly with other eligible depositors.

Quantity of deposits under GMS

  • Minimum deposit at any one time shall be 10 grams of raw gold (bars, coins, jewellery excluding stones and other metals). 
  • No maximum limit for deposit.

Types of deposits under GMS

  • Short Term Bank Deposit (STBD)
  • Medium and Long Term Government Deposit (MLTGD)*

 

 Short Term Bank Deposit (STBD) Medium and Long Term Government Deposit (MLTGD)
Tenor 1-3 years (with a facility of roll over).
Allowed for broken periods (e.g. 1 year 3 months; 2 years 4 months 5 days; etc.). 		Medium-term – 5-7 years
Long term – 12-15 years
Allowed for broken periods (e.g. 5 years 7 months; 13 years 4 months 15 days; etc.).
Lock-in period Determined by designated banks. Medium Term Government Deposit (MTGD) – 3 years
Long Term Government Deposit (LTGD) – 5 years
Liability Treated as liability on the bank’s balance sheet. Accepted by the designated banks on behalf of the Central Government, hence, not reflected in the balance sheet of the designated banks.
Interest rates Decided by designated banks. Decided by Central Government and notified by RBI. The current rates of interest are –
MTGD – 2.25% p.a.
LTGD – 2.50% p.a.
Interest calculation With reference to the value of gold in Indian Rupees at the time of deposit. With reference to the value of gold in Indian Rupees at the time of deposit.
Interest denominated and paid in Indian Rupee only Indian Rupee only
Periodicity of interest payment On the respective due dates and withdrawable periodically / at maturity. Annual and paid on 31st March every year.
Depositor has an option to receive payment of simple interest annually or cumulative interest (compounded annually) at the time of maturity. The option to be exercised at the time of deposit.
Principal denominated in Gold Gold
Redemption of principal at maturity At the option of the depositor, can be either in Indian Rupee equivalent of the value of deposited gold at the time of redemption, or in gold. The option to be exercised at the time of deposit and is irrevocable. At the option of the depositor, can be either in Indian Rupee equivalent of the value of deposited gold at the time of redemption, or in gold. The option to be exercised at the time of deposit.
Where the redemption of the deposit is in gold, an administrative charge at a rate of 0.5% of notional redemption amount in terms of Indian Rupee is collected from the depositor.
Pre-mature withdrawal The designated banks may, at their discretion, allow whole / part premature withdrawal of the deposit subject to minimum lock-in period and penalties determined by them.
Premature redemption is in Indian Rupee equivalent or gold at the discretion of the designated banks. 		Pre-mature redemption in Indian Rupee only.
Commission to designated banks

-

 Designated banks are paid handling charges (including gold purity testing, refining, transportation, storage and any other relevant costs) for new deposits at 1.5% and commission for new and renewed deposits at 1% of the rupee equivalent of the amount of gold mobilized for MLTGD.
Loans Rupee loans can be availed against the collateral of deposits. Rupee loans can be availed against the collateral of deposits.

(Updated on March 25, 2025)

*Government of India has discontinued the MLTGD components of GMS with effect from March 26, 2025. Accordingly, any gold deposits tendered at the designated Collection and Purity Testing Centre (CPTC) or GMS Mobilisation, Collection & Testing Agent (GMCTA) or the designated bank branches towards MLTGD component of GMS shall not be accepted after March 25, 2025. The designated banks, at their discretion, may offer STBD under GMS. The MLTGD mobilized till March 25, 2025 shall continue till redemption.

What are interest rates for pre-mature redemption of MTGD and LTGD?

The amount payable to the depositor on premature withdrawal is calculated as a sum of (A) and (B) below – 

(A) Actual market value of the gold deposit on the day of withdrawal.

(B) Interest payable on the value of the gold at the time of deposit as under –

Medium Term Government Deposit (MTGD)
Reason for pre-mature redemption (after lock-in period of 3 years) Actual period for which the deposit has run (years)
>3 and < 5 ≥5 and < 7
- MTGD rate (-) 0.375% MTGD rate (-) 0.25%
Death MTGD rate (-) 0.25% MTGD rate (-) 0.125%
Default of loan taken against MTGD MTGD rate (-) 0.375% MTGD rate (-) 0.25%

 

Long Term Government Deposit (LTGD)
Reason for pre-mature redemption (after lock-in period of 5 years) Actual period for which the deposit has run (years)
>5 and < 7 ≥ 7 and < 12 ≥12 and < 15
- MTGD rate (-) 0.25% LTGD rate (-) 0.375% LTGD rate (-) 0.25%
Death MTGD rate (-) 0.125% LTGD rate (-) 0.25% LTGD rate (-) 0.125%
Default of loan taken against LTGD MTGD rate (-) 0.25% LTGD rate (-) 0.375% LTGD rate (-) 0.25%

 

Medium Term Government Deposit (MTGD)
Reason for pre-mature redemption (before lock-in period of 3 years) Actual period for which the deposit has run

Up to 6 months

 >6 months and <1 year ≥1 year and <2 years ≥2 years and <3 years
Death No interest MTGD (-) 1.25% MTGD rate (-) 1.00% MTGD rate (-) 0.75%
Default of loan taken against MTGD

No interest

 MTGD (-) 1.375% MTGD rate (-) 1.125% MTGD rate (-) 0.875%


Long Term Government Deposit (LTGD)
Reason for pre-mature redemption (before lock-in period of 5 years) Actual period for which the deposit has run
Up to 1 year >1 year and <2 years ≥2 years and <3 years ≥3 years and <5 years
Death No interest MTGD rate (-) 1.00% MTGD rate (-) 0.75% MTGD rate (-) 0.25%
Default of loan taken against LTGD No interest MTGD rate (-) 1.125% MTGD rate (-) 0.875%

MTGD rate (-) 0.375%

Procedure for a customer to make a deposit under GMS

  • An eligible depositor can open a Gold Deposit Account with any of the designated banks after meeting the KYC norms. 
  • Deposits can be made at CPTC / GMCTA which would then test the purity of the customers’ gold in their presence and issue deposit receipts of the standard gold of 995 fineness to the depositor and inform the customers’ respective bank about acceptance of deposit. 
  • The designated bank credits STBD account of the customer with the amount of 995 fineness gold, either on the same day of receipt of deposit receipt by the depositor or within 30 days of deposit of gold at CPTC / GMCTA (regardless of whether the depositor submits the receipt or not), whichever is earlier.


References

Reserve Bank of India. (2015, October 22). 'Gold Monetization Scheme, 2015 (Updated as on August 04, 2022)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10084&

Reserve Bank of India. (2022, March 29). 'FAQ-Gold Monetisation Scheme, 2015'. Retrieved from https://rbi.org.in/Scripts/FAQView.aspx?Id=110

Reserve Bank of India. (2025, March 25). 'Gold Monetization Scheme (GMS), 2015 - Amendment'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12801&Mode=0


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

National Strategy for Financial Inclusion (NSFI) 2025-30

Reserve Bank of India (RBI) has published National Strategy for Financial Inclusion (NSFI) 2025-30. Financial Inclusion The Committee on Financial Inclusion (Chairman: Dr C Rangarajan, RBI, 2008) defined financial inclusion as “the process of ensuring access to financial services, timely and adequate credit for vulnerable groups such as weaker sections and low-income groups at an affordable cost”. The Committee on Medium-Term Path to Financial Inclusion (Chairman: Shri Deepak Mohanty, RBI, 2015) viewed financial inclusion as, “convenient access to a basket of basic formal financial products and services that should include savings, remittance, credit, government-supported insurance and pension products to small and marginal farmers and low income households at reasonable cost with adequate protection progressively supplemented by social cash transfers, besides increasing the access of small and marginal enterprises to formal finance with a greater reliance on technology to cut costs an...
Post a Comment
Read more

RBI’s Monetary Policy (December 05, 2025): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on December 05, 2025. Here are some of the highlights of the monetary policy announcement. Rates   Change Rate Policy repo rate Reduced by 25 bps 5.25% Standing deposit facility (SDF) rate 5.00% Marginal standing facility (MSF) rate 5.50% Bank rate 5.50% Monetary policy stance Monetary policy stance unchanged as ‘neutral’. Domestic Economy  Real Gross Domestic Product (GDP) growth accelerated to 8.2% in Q2, buoyed by strong spending during the festive season which was further facilitated by the rationalisation of the goods and services tax (GST) rates.  Real GDP growth for 2025-26 is projected at 7.3%. For the first time since the adoption of flexible inflation targeting (FIT), average headline inflation for a quarter at 1.7% in Q2, breached the lower tolerance threshold (2%) of the inflation target (4%). It dipped further to an all-time low of 0.3% in October 2025. The underlying inflation pressu...
Post a Comment
Read more

Export / Import of Currency and Possession / Retention of Foreign Currency

Reserve Bank of India (RBI) has updated the guidelines on export and import of currency. What are the guidelines on export and import of Indian currency? Transferor Transfer from Transfer to Nature of currency Maximum limit Person resident in India India Countries other than Nepal and Bhutan Currency notes of Government of India (GoI) and RBI notes ₹25000 per person Commemorative coins 2 coins Person resident in India gone out of India on temporary visit, on his return Countries other than Nepal and Bhutan India Currency notes of GoI and RBI notes ₹25000 per person Person resident outside India (not citizen of Pakistan / Bangladesh) visiting India India Any country Currency notes of GoI and RBI notes ₹25000 per person Any country India Person (not citizen of Pakist...
Post a Comment
Read more

Rupee Interest Rate Derivatives

Reserve Bank of India (RBI) has issued directions on rupee interest rate derivatives. What is Interest Rate Derivative (IRD)? Interest Rate Derivative (IRD) means a financial derivative contract whose value is derived from one or more Rupee interest rates, prices of Rupee interest rate instruments, or Rupee interest rate indices. To which transactions shall the directions be applicable? The directions shall be applicable to Rupee IRD transactions undertaken in the over-the-counter (OTC) market and on recognised stock exchanges in India. Forward Contracts in Government Securities shall be undertaken in the OTC market in terms of the Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025, dated February 21, 2025. Who are eligible participants in IRD markets? Resident Non-resident, through its central treasury or its group entity, where applicable.  What are the directions on trading of IRDs on recognised stock exchanges? A recognised stock exchange is per...
Post a Comment
Read more

What are Government Securities (G-Secs)?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the tenures of G-Secs? G-Secs can be short-term securities (with original maturities of less than 1 year) or long-term securities (with original maturity of 1 year or more).  In India, the Central Government issues both short-term and long-term securities while the State Governments issue only long-term securities. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs ...
Post a Comment
Read more