The Central Government is reportedly planning to revamp the Gold Monetisation Scheme (GMS) by allowing jewellers to act as collection partners for the first time. According to a Moneycontrol report, the proposed changes aim to simplify gold deposits and encourage households to bring idle gold into the formal financial system.
The move marks a shift from the earlier bank-led model, with policymakers expecting jewellers' wider retail presence and customer relationships to improve participation in the scheme.
According to Moneycontrol, the revised Gold Monetisation Scheme will allow jewellers to serve as collection partners, making the deposit process more accessible for households.
Under the Gold Monetisation Scheme, individuals and institutions can deposit idle gold with designated banks or collection centres after purity verification. Depositors earn interest in the value of their gold deposits, while banks use the mobilised gold for lending, sale, or reserve purposes, helping reduce the country's dependence on imported bullion.
The proposed framework is expected to retain banks' role while simplifying the collection process through jeweller participation.
According to Moneycontrol, government officials believe that operational improvements alone may not significantly increase participation.
The report quoted a government source saying that many households remain hesitant to monetise their gold because they fear tax-related scrutiny once their holdings enter the formal financial system.
According to the source, concerns over possible questions regarding gold ownership and tax compliance continue to discourage voluntary participation, making trust one of the biggest challenges for the scheme.
Another source told Moneycontrol that households interact with jewellers more frequently than banks for gold-related transactions, making jewellers a natural channel for expanding the scheme's reach.
The report noted that the government scaled back the original Gold Monetisation Scheme in March 2025, discontinuing its medium- and long-term deposit options after reviewing the scheme's performance.
While existing deposits continued until maturity, only short-term bank deposits were retained.
According to Moneycontrol, the earlier framework faced several operational challenges, including:
Households were required to visit designated collection and hallmarking centres.
Jewellery had to undergo melting or purity testing before deposit.
Depositors had to complete extensive KYC formalities.
Gold deposit accounts had to be opened through designated banks.
The report added that these operational complexities, combined with low participation, limited the scheme's success.
The Gold Monetisation Scheme was launched in 2015 to mobilise idle household gold and reduce India's reliance on imported bullion.
According to official data cited by Moneycontrol, the scheme had mobilised around 39 tonnes of gold by November 2025, a small fraction of India's estimated 25,000–30,000 tonnes of household gold holdings.
The earlier scheme offered:
Short-term bank deposits of 1-3 years
Government-backed medium-term deposits
Government-backed long-term deposits
Depositors earned interest based on the gram value of the deposited gold and could choose redemption in cash or its gold equivalent at maturity.
The government is looking to increase the mobilisation of domestic gold to reduce dependence on imported bullion and ease pressure on the current account deficit.
According to Moneycontrol, India holds an estimated 30,000 tonnes of household gold, much of which remains idle.
Despite the increase in gold import duty to 15% from 6% in May 2026, demand for the precious metal has remained strong.
The report noted that:
Gold imports increased by about 24.1% to $72 billion in FY26 from $58 billion a year earlier.
Imports during April and May 2026 continued to grow year-on-year despite higher import duties.
Under HS Code 7108, gold imports surged about 108.1% from $34.6 billion in FY21 to $72 billion in FY26.
Gold was trading near ₹1.47 lakh per 10 grams, reflecting sustained domestic demand.
According to officials quoted by Moneycontrol, mobilising domestic gold could improve the availability of gold within the country for productive use while reducing reliance on imports over the long term.
According to Moneycontrol, the government is considering significant changes to the Gold Monetisation Scheme by bringing jewellers into the collection process. While the revised framework aims to simplify participation, officials indicated that addressing concerns around tax scrutiny and building public trust will remain important for improving participation in the scheme.
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Published on: Jul 7, 2026, 12:14 PM IST
Rakesh Deshmukh
Rakesh Deshmukh is a financial content specialist with around 3 years of experience writing impactful content across equities, mutual funds, IPOs, and personal finance. At Angel One, he decodes real-time market trends and breaking news, helping investors and traders stay updated. He also helps investors make informed decisions by simplifying market fundamentals and technical analysis. He holds a bachelor’s degree in commerce.
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