(Reuters) – India has discontinued elements of a scheme that inspired households and establishments to deposit idle gold in trade for curiosity funds.
The gold monetisation scheme, launched in 2015, included gold deposits for 1-to-3 years, 5-to-7 years and 12-to-15 years.
The 5-to-7 and 12-to-15 yr deposits have been discontinued, the finance ministry mentioned late on Tuesday, citing evolving market circumstances and efficiency of the scheme.
Banks can proceed to supply short-term gold deposits based mostly on business viability, the ministry mentioned.
The transfer is more likely to scale back the federal government’s future obligations and minimise dangers associated to gold costs. While banks paid the curiosity on the short-term deposits, the federal government paid it for the medium- and long-term ones.
Prices of gold, which is seen as a hedge in opposition to geopolitical and financial uncertainties, have risen greater than 15% this yr, pushed by escalating geopolitical tensions and uncertainties over U.S. tariff coverage.
The current gold deposits will proceed till their maturity, India’s finance ministry mentioned.
The Reserve Bank of India has amended its grasp instructions on the scheme to account for the modifications.
(Reporting by Aleef Jahan in Bengaluru)
