- Encourages
recycling, reuse, and circulation of existing gold within India as a
responsible national priority
- Recommends
customer-friendly reforms and jeweller integration to strengthen India’s
formal gold ecosystem
Mumbai :
Malabar Gold & Diamonds has submitted a comprehensive proposal to the
Government of India recommending strategic enhancements to the Gold
Monetisation Scheme (GMS), expressing its wholehearted support to Prime
Minister Narendra Modi’s appeal on responsible gold consumption and the need to
strengthen India’s economic resilience through better utilisation of domestic
gold resources.
The proposal, submitted by
Mr. M.P. Ahammad, Chairman, Malabar Group, to Hon’ble Finance Minister Smt.
Nirmala Sitharaman and Hon’ble Commerce & Industry Minister Shri Piyush
Goyal, outlines practical measures aimed at increasing public participation in
GMS, mobilising idle gold into the formal economy, and encouraging greater
recycling, reuse, and circulation of existing gold within India.
India imports nearly 700–800
tonnes of gold annually, resulting in significant foreign exchange outflows and
pressure on the current account deficit. At the same time, Indian households
and institutions are estimated to hold nearly 25,000–35,000 tonnes of gold in
the form of jewellery, coins and bars, much of which remains economically idle.
Malabar Gold & Diamonds
stated that greater focus on recycling, exchange, reuse, and monetisation of
existing domestic gold can play an important role in reducing import
dependency, limiting dollar outflow, and strengthening the Indian economy over
the long term.
Commenting on the proposal,
Mr. M.P. Ahammad, Chairman, Malabar Group, said: “India
possesses one of the world’s largest privately held gold reserves while
continuing to rely significantly on imports to meet domestic demand. We
wholeheartedly support the Hon’ble Prime Minister’s appeal and believe that
encouraging responsible utilisation, recycling, and circulation of existing
gold within the country is an important national priority. With appropriate
policy support and active integration of the organised jewellery sector, the
Gold Monetisation Scheme can emerge as a highly effective mechanism for
mobilising idle gold into the formal economy.”
The proposal notes that
while the Gold Monetisation Scheme was introduced to reduce import dependence
and monetise idle domestic gold holdings, public participation remained limited
due to longer lock-in periods, lower perceived returns, limited redemption
flexibility, and procedural challenges.
To improve effectiveness and
adoption of the scheme, Malabar Gold & Diamonds has recommended:
- Integration of organised jewellers into
the GMS framework under regulatory oversight
- Reduction in minimum deposit quantity
from 10 grams to 1 gram
- Flexible redemption options in either
gold weight or cash
- Lower lock-in periods and improved
liquidity options
- Simplified Aadhaar-based e-KYC
procedures
- Customer incentives through jeweller
participation, including loyalty-linked benefits
- Improved transparency in purity testing,
valuation, and refining
- Consideration of GST waiver on gold
brought back into the formal system
- Alignment of GMS with Gold Metal Loan
(GML) frameworks for better utilisation within the industry
The proposal also recommends
a jeweller-assisted collection and facilitation framework operating under bank
and regulatory supervision, with digital tracking systems and transparent
processing mechanisms to improve customer confidence and operational efficiency.
According to the proposal,
mobilisation of even 1–2% of India’s domestic gold holdings could potentially
release nearly 600–700 tonnes of gold into circulation, equivalent to a
substantial portion of the country’s annual gold import demand.
Malabar Gold & Diamonds
believes that encouraging recycling, reuse, exchange, and monetisation of
existing gold within India can become a meaningful economic lever for the
country. The company stated that a stronger and more accessible Gold Monetisation
Scheme can help reduce import dependence, lower foreign exchange outflows,
improve circulation of domestic gold resources, and contribute towards building
a more resilient and self-reliant economy in line with the Hon’ble Prime
Minister’s vision.