Reigniting Trust: India's Gold Monetisation Scheme Seeks Revival Amid Household Hesitations

Indian Government Revamps Gold Monetisation Scheme to Overcome Trust Issues

The Indian government's latest attempt to revive the Gold Monetisation Scheme (GMS) involves making it easier for households to deposit gold by partnering with jewellers for the first time. The revamped scheme marks a significant departure from the earlier bank-led model, with policymakers hoping that jewellers' retail presence and customer relationships will encourage more households to bring idle gold into the formal financial system.

However, conversations with multiple sources suggest that the redesign addresses only one part of the problem. While jewellers may simplify the collection process, finance ministry officials admit that many households remain reluctant to monetise their gold because they fear tax scrutiny and questions over their holdings once they enter the formal system. The scheme allows individuals and institutions to deposit their idle gold with designated banks or collection centres after purity verification, earning interest on the value of gold or gold deposits.