What changed
The Medium and Long Term Government Deposit (MLTGD) component of the Gold Monetization Scheme (GMS) has been discontinued effective March 26, 2025. No new MLTGD deposits or renewals will be accepted after March 25, 2025. Existing MLTGD deposits mobilized before this date will continue as per existing guidelines until redemption.
What it means for you
Banks can no longer accept gold deposits under the MLTGD category, which offered 5-7 year medium term or 12-15 year long term government deposits. However, banks retain the discretion to offer Short Term Bank Deposits (STBD) under GMS. This reduces the product suite for gold monetization but keeps the short-term option available. Banks must update their internal systems and customer communication to reflect this change.
What you must do
- Stop accepting new MLTGD deposits and renewals from March 26, 2025.
- Update internal guidelines, customer-facing documents, and digital platforms to remove MLTGD references.
- Communicate the change to branch staff and customers, clarifying that STBD remains available at bank's discretion.
- Ensure existing MLTGD deposits are managed per extant guidelines until redemption.
- Review and update the Master Direction amendments as per the RBI circular.
Who it affects
All Scheduled Commercial Banks (excluding Regional Rural Banks), Designated banks under GMS, Customers holding or planning MLTGD deposits, Collection and Purity Testing Centres (CPTC) and GMS Mobilisation, Collection & Testing Agents (GMCTA)
Can banks still offer gold deposits under GMS after March 25, 2025?
Yes, banks may offer Short Term Bank Deposits (STBD) under GMS at their discretion. However, the Medium and Long Term Government Deposit (MLTGD) component is discontinued from March 26, 2025.
What happens to existing MLTGD deposits?
Existing MLTGD deposits mobilized on or before March 25, 2025 will continue as per the existing guidelines until their redemption. No new deposits or renewals under MLTGD are allowed after this date.
Is this change applicable to all banks?
This circular applies to all Scheduled Commercial Banks except Regional Rural Banks (RRBs).