About

• The Gold Monetisation Scheme (GMS) was announced in 2015 with the objective to reduce country’s reliance on the import of gold in the long run and mobilise gold held by households and institutions in the country to facilitate its use for productive purposes. 
• The scheme provides Resident Indians an option to deposit idle gold with a Reserve Bank of India (RBI) designated bank for a short, medium, and long tenure and earn interest on the same. 
• The minimum deposit at any one time is 10 grams of raw gold (bars, coins, jewellery excluding stones and other metals) and there is no maximum limit for deposit under the scheme. 
• The GMS is comprised of 3 component: 
  • Short Term Bank Deposit (1-3 years); 
  • Medium Term Government Deposit (5-7 years), and 
  • Long-Term Government Deposit (12-15 years).

Why in News?

• The government has decided to discontinue the Medium Term and Long Term Government Deposit components of the Gold Monetisation Scheme in view of the evolving market conditions.
• However, the banks may continue their short term gold deposit schemes (1-3 years) based on the commercial viability as assessed by them.
• The Gold Monetisation Scheme is the second gold scheme to face closure by the government in recent months amid a sharp surge in gold prices. The Centre had earlier discontinued fresh issuance of Sovereign Gold Bonds (SGBs).