‘Receiving Many Such Proposals,’ Says FM Sitharaman On Gold Monetisation Scheme

The Centre has recently taken multiple steps to reduce India’s massive imports of gold. These include a push for postponing gold buying by Prime Minister Modi, an increase in the import duty on gold and the introduction of a limit on the amount of gold which can be imported under the Advance Authorisation (AA) scheme to 100 kg per licence. Along with these measures, several proposals have also been made to the government regarding the Gold Monetisation Scheme.

On May 25, Union Finance Minister Nirmala Sitharaman addressed the media on the sidelines of the TEXPROCIL Export Awards and highlighted that the government is actively receiving numerous industry proposals to restructure and expand the Gold Monetisation Scheme (GMS).

“I am receiving many such suggestions. However, at this moment, I am not in a position to say anything further. Proposals can continue to be sent to me, but I cannot comment more right now,” Sitharaman said.

Notably, Sitharaman’s statement follows recent rumours around a separate plan to monetise institutional gold held by temple trusts, which the Finance Ministry officially dismissed on May 19, 2026. However, Sitharaman’s recent statement regarding the GMS hints that the proposals are currently being reviewed.

Understanding the Gold Monetisation Scheme

The Gold Monetisation Scheme was launched in 2015. The scheme was designed to mobilise India’s household gold hoard and turn it into a productive asset while reducing the country's heavy dependence on imports.As a part of the scheme, individuals had the option of depositing the physical gold they held at Bureau of Indian Standards (BIS) certified collection centres. The gold would then be melted, tested for purity, and then converted into bank deposits. Investors would then earn interest on the value of the gold, and once the deposit matured, they would have the option of redeeming their deposit.

Is the Gold Monetisation Scheme Currently Active?

When it was first introduced, the gold monetisation scheme operated across short-term (1 to 3 years), medium-term (5 to 7 years), and long-term (12 to 15 years) tenures. However, currently only the short-term deposit option is available.

Such deposits are handled by individual banks, which set their own interest rates (usually around 2 per cent to 2.5 per cent), and allow the account holder to redeem their investment in cash or physical gold at maturity.As of May 2026, several industry bodies from the jewellery sector have made representations to the government for revamping the scheme. The Gem & Jewellery Export Promotion Council (GJEPC) and Malabar Gold & Diamonds have put forth the demand for reviving and revamping the scheme.

How Can GMS Benefit Depositors?

Individuals who hold gold in lockers end up paying locker fees for the yellow metal. Sitharaman’s acknowledgement hints that the proposals are likely to be reviewed. An optimised version of the GMS could offer distinct financial incentives to investors, including active returns in the form of interest earned on the deposits.

The scheme also eliminates ‘storage risk’ where individuals who have gold jewellery, bars or coins no longer need to pay storage fees or locker costs to keep their gold safe.Despite these benefits, depositors should remember that the gold deposited is melted down during the purity testing process, and the jewellery cannot be returned in its original crafted form upon maturity.