MMTC PAMP calls for better Gold Monetisation Scheme

India's gold recycling potential remains untapped, according to Samit Guha, managing director of MMTC PAMP, the country's sole gold-refining unit accredited by the London Bullion Market Association. The nation holds approximately 31,000 tonnes of gold within households, but imports roughly 800 tonnes each year. To capitalize on this resource, Guha advocates for a more enticing Gold Monetisation Scheme (GMS) that could redirect some of this metal into the formal market, stimulating recycling and reviving underutilized refining capacity.

Currently, India possesses about 1,800 tonnes of gold-refining capacity, much of which operates at a fraction of its potential.

The government is collaborating with various stakeholders to devise an enhanced GMS, following the limited progress of the initial scheme introduced in 2015. MMTC PAMP presently recycles around 22 tonnes of gold annually and aims to boost this figure by 10-15% each year. With the ability to refine 300 tonnes of gold and 600 tonnes of silver per year, the company has ample room to expand its recycling efforts.

By channeling more recycled gold into the domestic market, India could alleviate pressure on its current-account deficit by substituting a portion of imported bullion with domestically sourced metal. This recycling process complements imports rather than replacing them, according to Guha. He emphasizes that India's future gold narrative should revolve around the efficient, transparent, and responsible circulation and monetization of the gold already in the country's possession.