The Indian government has partially discontinued its gold monetisation scheme, eliminating the medium-term (5-7 years) and long-term (12-15 years) deposit options while maintaining the short-term (1-3 years) program.
The finance ministry cited “evolving market conditions and performance of the scheme” as reasons for the change.
While banks handled interest payments for short-term deposits, the government was responsible for medium and long-term interest payments, making this move likely intended to reduce future financial obligations as gold prices surge.
Existing deposits will continue until maturity, and the Reserve Bank of India has updated its master directions accordingly. Gold prices have risen more than 15% this year as investors seek safe havens amid geopolitical tensions and economic uncertainties.