To unlock idle gold, government may ask jewellers to take deposits in proposed scheme

The Indian government is exploring a gold monetisation scheme to encourage depositing idle gold holdings, according to sources within the jewellery industry. The proposed scheme would see jewellers play a crucial role in collecting physical gold from customers, who would then receive interest income on their gold deposits, much like returns on stocks in a demat account.

Experts estimate that the amount of gold locked up in Indian households could exceed 20,000 tonnes, which, if monetised, could potentially help achieve a trade account surplus for the country. Nilesh Shah, Managing Director of Kotak Mahindra AMC, believes that monetising just 10% of the gold held could be equivalent to five years' worth of foreign direct investment into India.

The involvement of jewellers, rather than banks, in the collection process distinguishes this scheme from a previous attempt in 2015, which mobilised only 38 tonnes of gold by March 2025. The move is expected to make gold deposits more accessible and comfortable for Indian families, given their existing trust networks with family jewellers.

Additionally, the proposal may be expanded to include gold coins and bars, further broadening the scope for gold deposits. The government has been considering this gold monetisation scheme for some time, with an initial expectation of its implementation by August 15. However, an industry expert has expressed confidence that it could be announced by the time the festival season begins in October.