Govt Plans Revamped Gold Monetisation Scheme; Jewellers May Be Allowed to Collect Gold Deposits

The Central Government is likely to introduce a revamped Gold Monetisation Scheme (GMS) within the next two weeks, aimed at bringing idle household gold into the formal economy and reducing India`s dependence on gold imports.

Jewellers May Join the Scheme

A key proposed change is the inclusion of jewellers as authorised collection partners, allowing households to deposit their unused gold through trusted jewellery stores instead of only banks. The move is expected to make the scheme more convenient and accessible.

What is the Gold Monetisation Scheme?

Launched in 2015, the Gold Monetisation Scheme allows individuals to deposit unused gold with authorised institutions and earn interest on it. The deposited gold is refined and converted into bars, while investors receive either physical gold or its cash equivalent at maturity, depending on the deposit type.

Why is the Scheme Being Revamped?

Despite India holding an estimated 25,000 tonnes of household gold, only 38 tonnes had been monetised by March 2025, highlighting the limited success of the original scheme.

Experts say the revamped model could unlock significant economic value. If just 5% of household gold is monetised, it could generate nearly $90 billion in liquidity and reduce the country`s reliance on imported gold.

Why Did the Original Scheme Fail?

The earlier scheme faced several challenges:

- Many families were unwilling to melt inherited or sentimental jewellery.

- Concerns over documentation and tax scrutiny discouraged participation.

- Banks had little incentive to actively promote the scheme.

The government incurred high costs by paying interest and bearing the impact of rising gold prices.

How Will the New Scheme Benefit People?

If approved, the revised scheme would allow people to earn returns on idle gold instead of keeping it locked away. A larger network of jewellers could make gold deposits easier and encourage greater public participation.

However, the scheme`s success will depend on its final guidelines, especially how it addresses concerns related to jewellery, documentation and customer convenience.

Source: Moneycontrol