Archive · 24 Aug 2026
Why India’s Gold Monetisation Scheme Needs a Trust-Focused Revival
Many Indian households own gold jewellery, coins or bars that are not being used.
The Gold Monetisation Scheme lets people deposit this gold with approved banks.
The gold is tested, refined and recorded in a gold deposit account.
In return, depositors can earn interest and eventually redeem their gold’s value.
The first version did not attract many households.
People may not trust the process or may not want inherited jewellery to be melted.
The scheme was also not widely understood or convenient.
A new version could work better if it is simple, transparent and carefully managed.
India’s 2015 Gold Monetisation Scheme created a formal system for depositing gold, but attracted modest participation.
Household gold holdings are estimated at 23,000–25,000 tonnes, while only 6% of households reportedly knew about the scheme.
Trust, emotional attachment to jewellery, limited awareness and operational complexity have hindered adoption.
The scheme could support bullion markets, financialisation, productive use of gold and reduced import dependence.
A revised programme should prioritise simple processes, transparent valuation, digital tracking and predictable redemption options.
- Who
- Indian households and institutions, designated banks, testing centres, refiners and jewellers are involved.
- What
- India is considering a trust-focused revival of its Gold Monetisation Scheme to bring privately held gold into the formal financial system.
- When
- The original scheme was introduced in 2015; its medium-term and long-term government deposits were discontinued on March 26, 2025.
- Where
- The scheme operates in India through designated banks, Collection and Purity Testing Centres, mobilisation agents, refiners and bank branches.
- Why
- The stated goals are to put idle gold to productive use, strengthen formal bullion markets and reduce long-term dependence on gold imports.
Case for revival
Concerns about revival
Economic purpose
Case for revival
Mobilising even a small portion of India’s gold stock could support bullion supply, financialisation and lower import dependence over time.
Concerns about revival
The original scheme mobilised only a modest amount relative to India’s total gold stock, suggesting that economic potential alone may not generate participation.
Household participation
Case for revival
A revised programme could attract depositors by focusing initially on bars, coins, temple gold and institutional holdings, which may be easier to monetise.
Concerns about revival
Households may resist depositing jewellery because it can have emotional or inherited value and is melted during the process.
Implementation
Case for revival
Simple customer journeys, transparent valuation, digital tracking, standardised receipts and predictable redemption could build confidence.
Concerns about revival
Purity testing, refining, valuation, custody, documentation, redemption and grievance handling create operational, liquidity and gold-price risks for banks.
- Estimated household gold stock
- 23,000–25,000 tonnes, according to World Gold Council research cited in the article.
- Original scheme
- India’s Gold Monetisation Scheme was introduced in 2015.
- Minimum deposit
- 10 grams of raw gold.
- Eligible gold
- Bars, coins and jewellery, excluding stones and other metals.
- Standard fineness
- Deposited gold is converted to standard 995 fineness.
- Household awareness
- A cited India Gold Policy Centre survey found that only 6% of households were aware of the scheme.
- Government deposits
- Medium-term and long-term government deposits were discontinued on March 26, 2025.