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Posted by on Nov 23, 2015 in Schemes |


The GOLD MONETIZATION SCHEME will replace existing gold deposit scheme, 1999.


  • Open a gold deposit account with bank.
  • Min Deposit: 30 gram gold of 995 fineness. No max limit of deposit.
  • Min Tenure: 1 Year;
  • 3 Type Deposit: Short Term Gold Deposit (1-3 yr), Medium (5-7 yr) & Long (12-15 yr).
  • KYC: Gold Deposit account will subject to same rules as any other deposit account.
  • Interest rate: Bank free to decide interest rate. However govt fix interest rate for medium term at 2.25% and long term deposit at 2.5% which is more lucrative provision than previous scheme of 1%.
  • Reserve Requirement: Short term bank deposit will be subjected to CRR & SLR requirements. But stock of gold held by banks shall be counted under general SLR requirements.
  • Eligibility: Resident Indians (Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme.


Utilization of Gold under GMS:

  • Short Term Gold Deposit (STGD): The gold accepted under Short term gold deposit (STBD) may be given to MMTC (Metals and Minerals Trading Corporation of India) to issue India gold coins and to jewelers or other option is sell it to other banks that are participating in Gold Monetization Scheme (GMS).
  • Medium & Long Term Gold Deposit (MLTGD): This gold will be auctioned by MMTC or any other agency that will be authorized by govt of India.


Critical Analysis

  • Melting ornaments in form of pure gold to avail benefits of Gold Monetization Scheme (GMS) can never be an attractive feature in country like India where Gold or ornament has a sacred place in people lives.
  • Provision of purity check at some Collection & Purity Test Centre (CPTC) before deposit gold in bank is a major hurdle in success of Gold Monetization Scheme (GMS). As it is time spending process because of lesser availability of CPTC across the country and further paying fees at CPTC make it less lucrative customers.

This scheme could be a destination of converting black money into legal one because banks can’t ask for source of gold but if bank ask then it would not be possible to disclose the source neither for Individuals as gold passes from one generation to other nor for big temples as donation can’t be tracked.

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