The Union Finance Ministry announced on Tuesday that it will discontinue the medium and long-term government deposit components of the Gold Monetisation Scheme, from March 26. The Finance Ministry said in its statement that the decision is based on a comprehensive review of the scheme’s performance and evolving market conditions.

Notably, this scheme was launched on September 15, 2015. Moreover, the scheme aimed to reduce the country’s dependency on gold imports and mobilise the vast gold holdings of households and institutions for productive use.

The scheme initially had three parts: short-term bank deposits (1-3 years), medium-term government deposits (5-7 years), and long-term government deposits (12–15 years).

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From March 26, the revised framework will come into effect. The deposits under the medium-term and long-term government deposit components will no longer be accepted at designated collection and purity testing centres (CPTC), gold monetisation scheme collection & testing agents (GMCTA), or at bank branches, from now.

Meanwhile, existing deposits under these components will continue until redemption. This will be in line with the current guidelines as stipulated in the Reserve Bank of India’s (RBI’s) master direction.

“While the MLTGD components are being discontinued, the short-term bank deposit (STBD) option will remain available. However, its availability will depend on the individual bank’s commercial viability assessments. The RBI is expected to release detailed guidelines on this in due course,” said the Finance Ministry, in its statement.

This decision is in line with the government’s ongoing efforts to refine the GMS and adapt it to the evolving financial landscape, while maintaining focus on gold’s role in the economy.

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