Year the scheme was introduced: 5th.November.2015


Gold monetisation was introduced by Government to earn interest on the idle gold lying at homes, GMS is like a gold savings account have we would generally keep gold in our homes without any security or store it in bank lockers by paying a certain fee to the bank, but instead of that we can hold gold in any form in a gold monetisation scheme account and earn interest according to the precious metal goes up and interest money is exempt from income tax as well as capital gains tax also. One can deposit a minimum of 30 grams to no limit of gold in any form like bars, coins, jewellery, the deposit of the gold is done by banks on behalf of the Central Government with the purity certificate.

Reason for implementation

As Indian households, over 20,000 tonnes of gold is lying idle, so Government came up with this Gold monetisation scheme that value of gold grows over time and keeping gold idle doesn't come cheap, so the main reason to introduce gold monetization scheme is to mobilize idle gold lying in houses and institutes to turn this new gold to productive purposes, which will also help in reducing India's dependability on gold imports, which will be a significant impact on the Indian economy. It also avails few benefits to the jewellers by allowing them to obtain loans, and also it extends its services to the lending institutions such as banks to monetize gold.


The leading reason for the introduction of this scheme are as follows:

1. It encourages gold deposits from households by limiting the gold deposit to 30 grams, which was earlier 500 grams.

2. This scheme also helps in finding out the black money.

3. They will be given specific benefits if they are certified by the Bureau of Indian Standards (BIS). This also helps them know the rate of interest they would be provided for a particular period.

4. To avail these benefits, they need to deposit the gold for a certain period which is one year and also the bank has designed several gold deposits schemes which are short term, i.e., 1 to 3 years, middle term, i.e., 5 to 7 years and long term 12 to 15 years.

5. This scheme also facilitates the bank to sell or lend gold, which is accepted under this scheme to the Metal and Minerals Trading Corporation of India (MMTC) to issue them gold coins or further sell them to different banks.

6. The individuals or the companies will be payable in the form of gold or the state of money as opted by them, i.e., the depositor when opening the bank account. And all of them can open a bank account and get the benefits of interest from the bank.

7. Those interests earned by the people will be excluded from the capital gains, income tax, and wealth tax, etc. which will attract the depositors.


This scheme reduces the import in the country and reduces people's dependence on physical gold as a part of savings. Because we feel that those bonds are similar to that of physical gold and hence invest in that.


This scheme aims to combine the gold in Indian households and temples to the broader economy which helps in reduction in the gold imports of the country.