India Scraps Gold Deposit Program After Underwhelming Results

India has terminated a decade-old program that allowed citizens to deposit gold with banks in exchange for interest payments, keeping only short-term options alive in a move reflecting the scheme’s limited success.

The Finance Ministry announced Tuesday it would discontinue medium and long-term deposits under its Gold Monetization Scheme effective March 26, while allowing banks to continue offering short-term facilities at their discretion.

Gold prices in India have jumped more than 41% since January 2024, reaching 90,450 rupees ($1,085) per 10 grams in late March, creating both challenges and opportunities for policymakers.

The scheme, introduced in 2015 by Prime Minister Narendra Modi’s government, attracted just 31.16 kilograms of gold from about 5,700 participants over nearly a decade — a fraction of the estimated 25,000 tonnes of gold held by Indian households and religious institutions.

Depositors earned 2.25% interest on medium-term deposits (5-7 years) and 2.5% on long-term options (12-15 years), rates that proved insufficient to overcome traditional reluctance to part with family gold.

The Reserve Bank of India confirmed existing deposits would remain protected until maturity, with depositors retaining all contractual rights.

This marks India’s second retreat from gold-related financial products in recent months, following its decision to halt issuance of sovereign gold bonds amid surging prices.

Gold remains culturally significant in India as both a status symbol and preferred investment, with demand typically spiking during wedding seasons and religious festivals.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

Giant Mining Encounters Native Copper As Hole MHB-34 Hits 563 Metres Depth

Verses Hits Commercialization Stage With Genius AI Platform

Related News

Radisson Mining: High-Grade Gold Discoveries At O’Brien Project

On October 7, Radisson Mining Resources Inc. (TSXV: RDS), a gold exploration company, announced bonanza-grade gold...

Saturday, October 10, 2020, 01:56:00 PM

Argonaut Gold To Begin Site Preparation Imminently At Magino Gold Property

Argonaut Gold (TSX: AR) had a notable update this morning for its Magino project, with...

Thursday, January 21, 2021, 07:52:18 AM

Infrastructure: The Hidden Value in Mining Projects with Mathew Wilson of Sterling Metals and EarthLabs

In this interview at the Precious Metals Summit 2024, Mathew Wilson, CIO of EarthLabs Inc....
Tuesday, September 17, 2024, 03:19:00 PM

How It Works: JPM Precious Metals Fined For Order Spoofing

Bloomberg reported September 23rd that an investigation by the US Department of Justice and the...

Wednesday, September 30, 2020, 12:15:00 PM

Grande Portage: Assays For Herbert Gold Property Expected In Near Term

Earlier this month, Grande Portage Resources (TSXV: GPG) announced that the company had completed the...

Sunday, November 22, 2020, 04:58:00 PM