RBI discontinues Medium and Long-Term Gold Deposits Under Gold Monetization Scheme [Read Notification]

The Reserve Bank of India (RBI), through Notification No. RBI/2024-25/132 dated March 25, 2025, has announced a major change in the Gold Monetization Scheme (GMS), 2015. The government has decided to stop accepting Medium Term and Long Term Gold Deposits (MLTGD) under this scheme starting March 26, 2025.

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This comes after a press release issued by the Government of India on the same day, which mentioned that no new deposits under the MLTGD category would be accepted after March 25, 2025. However, banks may continue to offer Short Term Bank Deposits (STBD) under GMS at their own discretion.

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What Was the Gold Monetization Scheme?

The Gold Monetization Scheme was launched in 2015 to mobilize gold held by households and institutions in India. Under this scheme, people could deposit their gold with banks and earn interest on it. The scheme had three categories:

1. Short-Term Bank Deposit (STBD) – handled by banks
2. Medium-Term Government Deposit (MTGD) – for 5 to 7 years
3. Long-Term Government Deposit (LTGD) – for 12 to 15 years

The STBD was managed by banks, but the MLTGD was managed by the Central Government and used for productive purposes like reducing gold imports.

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What Has Changed?

According to the amended RBI directions:

• No new Medium or Long Term Gold Deposits will be accepted from March 26, 2025.
• This includes both new deposits and renewals.
• Deposits made up to March 25, 2025, under MLTGD, will continue till their maturity and follow the existing rules.

The RBI has updated its Master Direction on GMS to reflect these changes.

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What Happens to Existing MLTGD Accounts?

• Deposits already made under the MLTGD category will not be affected and will continue until redemption.
• Depositors will be contacted by the bank at least 120 days before maturity to choose their preferred redemption option – either in gold or Indian rupees (INR).
• If no response is received within 30 days, the original choice made at the time of deposit will be followed.
• If the depositor still does not redeem the deposit within 60 days after maturity, the gold will automatically be converted into INR and credited to the depositor’s bank account.

What Should Depositors Do?

If you’re planning to deposit gold under the GMS, only Short Term Bank Deposits will be available after March 25, 2025. Those with existing MLTGD accounts should:

• Keep an eye out for communication from their bank.
• Decide how they want to redeem their deposit when it matures.
• Ensure their bank account details are up to date.

This change applies to all Scheduled Commercial Banks (excluding Regional Rural Banks). The updated rules and FAQs are available on the RBI website.

To Read the full text of the Notice CLICK HERE

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