What To Expect From The Revamped Gold Monetisation Scheme: Earn Yield On Idle Gold Via Local Jewellers

Indian households own the world’s largest hoard of gold, estimated at nearly 25,000 tonnes. Given the strong returns the yellow metal has delivered in the past year, many are looking to monetise their holdings. At the same time, the Centre is also mulling a means to provide a way to monetise or mobilise India’s massive household gold hoard.

According to multiple media reports, the Centre is expected to announce a revamped Gold Monetisation Scheme within the next two weeks. The revamped scheme seeks to change the decade-old gold monetisation scheme by allowing stakeholders such as jewellers to participate in the monetisation process.

The new scheme seeks to mobilise a larger part of India’s physical gold hoard, as the previous version of the scheme, introduced in 2015, only managed to mobilise 37.81 tonnes of gold till March 2025, according to a report by the India Brand Equity Foundation (IBEF).

High Prices Spark Household Interest

Given the strong gains the yellow metal has made, households that hold physical gold in the form of jewellery are interested in knowing about the scheme. The recent surge has changed the math for physical gold holders. Gold prices advanced 81.1 per cent on the Multi Commodity Exchange, closing the calendar year at Rs 1,35,570 per 10 grams in 2025. The momentum continued into 2026, with the yellow metal hitting an all-time intraday high of Rs 1,92,991 per 10 grams earlier this year.  As gold prices touch new highs, individuals are likely to consider putting their idle gold holdings to work and seeing how they can benefit from the proposed changes to the monetisation framework.

How the Gold Monetisation Scheme Works

The Gold Monetisation Scheme was framed to encourage individuals and institutions to deposit their idle gold into the formal banking system. The depositor would then get an annual interest on their holdings, which would be paid. The scheme had three fixed tenures for which the gold would be held, and upon maturity, the investor had the option to redeem their investment either in cash or as physical gold, depending on the terms of their deposit tenure.

One of the key reasons behind the revamp is India’s heavy dependence on gold imports to meet its massive domestic demand. India imported a record $71.98 billion worth of gold in the financial year 2025 to 2026. The scheme is expected to decrease the import burden by channelling idle gold into the formal economy and reducing foreign exchange, stabilising India’s current account deficit.

Beyond macroeconomic benefits, the initiative provides a financial advantage to households which own physical gold as they can potentially earn a yield from their holdings instead of having to pay locker fees to store unused jewellery.

What Should Investors Expect From The Gold Monetisation Scheme

Prithviraj Kothari, President of the India Bullion and Jewellers Association (IBJA) and Managing Director at RiddiSiddhi Bullions, told Outlook Money about some of the key things which can be expected from the revamped scheme. Kothari addressed the hesitation which families often experience while parting with their jewellery, but added that the current price rally might shift consumer behaviour and make them reconsider monetising their holdings.

"Honestly, the core problem hasn't really gone away, melting jewellery still means losing making charges and the emotional value tied to a piece passed down in the family. That said, sky-high gold prices this time around might tempt more people to reconsider, especially for gold that's already old, unused, or lying idle in lockers,” Kothari said.

Kothari added that gold-holders might consider monetising their holdings via the scheme if it is convenient and enables faster processing rather than just providing interest.

“But for cherished, wearable jewellery, the resistance will likely persist unless the scheme offers something genuinely better than just interest, like faster processing or added convenience through local jewellers," Kothari said.

Addressing the safeguards proposed to protect everyday investors from being shortchanged on the purity or weight of their deposits, he mentioned that there is a strict certification process involved.

"Yes, the revamped scheme leans on Collection and Purity Testing Centres (CPTCs) certified by the Bureau of Indian Standards, where gold is tested using X-ray Fluorescence (XRF) machines or fire assay before anything is melted. Depositors get a certificate showing the exact purity and weight, and if they disagree with the result, they can simply walk away with their gold back. Bringing trusted local jewellers into this process, under BIS oversight, is meant to add another layer of familiarity and reduce the fear of being cheated on caratage," Kothari said.

Kothari also detailed how jewellers plan to make the monetisation process as trusted and seamless. He highlighted that this time the industry is pushing for a localised and digital approach by onboarding jewellers as collection partners. People tend to trust their local jewellers and might be more comfortable compared to a bank counter.

"Jewellers are pushing to become official 'collection partners,' letting people deposit gold at a familiar neighbourhood shop instead of a bank counter that can feel intimidating and paperwork-heavy,” Kothari said.

Kothari also talked about additional proposals made by gold and jewellery industry bodies to the government for revamping the scheme, such as a digital demat account for gold and relief on the Goods and Services Tax (GST) levied upon conversion of gold.

“There's also a proposal for a digital 'demat' gold account routed through jewellers, plus relief on the GST charged when jewellery is converted into gold. The idea is to recreate the comfort of a gold loan, quick, local, and trusted, but through mobilisation instead of borrowing," Kothari said.