Understanding the Current Gold Scheme
Launched in 2015, the Gold Monetisation Scheme (GMS) was created to unlock the vast reserves of gold lying idle in Indian homes and temple vaults. The idea was simple: instead of letting gold sit in lockers, people could deposit it with banks, earn interest,
and help reduce India's reliance on expensive gold imports. Under the scheme, you can deposit raw gold, such as bars, coins, or jewellery, at a designated bank or a Collection and Purity Testing Centre (CPTC). The gold is then tested for purity, melted, and credited to your Gold Deposit Account in grams. However, the scheme has seen limited success, mobilising only around 39 tonnes out of an estimated 25,000 to 30,000 tonnes held by households.
Why a Revamp Is on the Cards
The primary reason for the revamp is the low uptake of the existing scheme. Many potential depositors found the process cumbersome, involving extensive documentation, limited collection centres, and a lack of trust in parting with family jewellery to have it melted down. The government's goal remains to reduce the country's massive gold import bill, which puts pressure on the national current account deficit. By making the scheme more attractive, policymakers hope to bring a significant portion of this privately held gold into the formal economy. Recent reports suggest that multiple meetings have been held between government officials, the RBI, and industry representatives to find a more effective model, with a potential rollout before the festive season.
The Key Change: Jewellers as Collection Points
The most significant reported change is the plan to involve local jewellers in the process. Instead of requiring depositors to go to a bank or a specialised testing centre, the new proposal would allow trusted family jewellers to act as collection and aggregation points. This leverages the existing relationship and trust that customers have with their local jewellers. Under the proposed model, jewellers would handle the initial collection, conduct preliminary purity assessments, and then route the gold to authorised refiners and banks. For this service, they would likely earn a commission or service fee, providing them an incentive to promote the scheme.
Streamlining Testing and Deposits
The involvement of jewellers is expected to make the entire process of testing and depositing gold much smoother. Currently, depositors must take their gold to a CPTC, where it is melted and refined to verify its purity before a deposit certificate is issued. This can be a lengthy and emotionally difficult process for those attached to their jewellery. While the gold will still need to be refined, routing it through a familiar jeweller may ease concerns. The aim is to create a wider, more accessible network for collection, removing a major bottleneck of the current system. This shift is designed to address the practical and emotional hurdles that have prevented many from participating so far.
What This Means for Gold Owners
For households with gold lying idle, this revamp could offer a more convenient and trustworthy way to earn returns. The ability to approach a local jeweller could make participation far less intimidating than dealing with formal banking channels. This could turn a non-performing asset into an interest-earning one. While the medium- and long-term deposit options were discontinued in 2025, the Short-Term Bank Deposit (1-3 years) remains active, allowing depositors to earn interest on their gold. The key benefit remains the same: earning an income on your gold holdings without losing ownership of the underlying asset's value. The proposed changes are about making it easier to access this benefit.
