Centre discontinues medium and long term government deposits under Gold Monetisation Scheme from 26 March 2025
The Finance Ministry announced on 25 March 2025 that the Medium Term and Long Term Government Deposit components of the Gold Monetisation Scheme would be discontinued from 26 March 2025.
Summary
The Finance Ministry announced on 25 March 2025 that the Medium Term Government Deposit (5–7 years) and Long Term Government Deposit (12–15 years) components of the Gold Monetisation Scheme (GMS) would be discontinued with effect from 26 March 2025. The decision was based on the scheme's performance and evolving market conditions. Gold tendered under these components will not be accepted from that date, but existing deposits will continue until redemption. The Short Term Bank Deposit (1–3 years) may continue at the discretion of individual banks based on commercial viability. The GMS was announced on 15 September 2015 to reduce India's reliance on gold imports and mobilise gold held by households and institutions.
Key facts
- Announced
- 25 March 2025, Ministry of Finance
- Effective
- 26 March 2025
- Discontinued
- Medium Term (5–7 yrs) and Long Term (12–15 yrs) Government Deposits
- Continues
- Short Term Bank Deposit (1–3 yrs), at banks' discretion
- Existing deposits
- Continue till redemption
- GMS launched
- 15 September 2015
Practice MCQs 4 questions
Which components of the Gold Monetisation Scheme were discontinued with effect from 26 March 2025?
Show answer
Correct answer: B — Medium Term and Long Term Government Deposits
The Medium Term and Long Term Government Deposit (MLTGD) components were discontinued; the Short Term Bank Deposit may continue at banks' discretion.
After the March 2025 changes to the Gold Monetisation Scheme, what happens to the Short Term Bank Deposit (1–3 years)?
Show answer
Correct answer: D — It continues at the discretion of individual banks based on commercial viability
The Short Term Bank Deposit may continue at the discretion of individual banks, based on their assessment of commercial viability.
What happens to gold already deposited under the Medium and Long Term Government Deposit components of the GMS, after they were discontinued in March 2025?
Show answer
Correct answer: A — It continues until redemption as per existing guidelines
Existing deposits under MLTGD continue until redemption as per the extant GMS guidelines.
Consider the following statements about the Gold Monetisation Scheme (GMS): 1. The GMS was announced on 15 September 2015 to reduce India's reliance on gold imports in the long run. 2. Under the GMS, the Long Term Government Deposit had a tenure of 12–15 years. Which of the above is/are correct?
Show answer
Correct answer: C — Both 1 and 2
The GMS was announced on 15 September 2015 to reduce reliance on gold imports and mobilise household and institutional gold. Its components were the Short Term Bank Deposit (1–3 years), Medium Term Government Deposit (5–7 years) and Long Term Government Deposit (12–15 years).