Malabar Gold Proposes Reforms to India's Gold Monetisation Scheme
Malabar Gold backs Modi’s call on responsible gold use, seeks overhaul of monetisation scheme
The Economic TimesImage: The Economic Times
Malabar Gold & Diamonds has proposed strategic enhancements to India's Gold Monetisation Scheme (GMS) in response to Prime Minister Narendra Modi's call for responsible gold use. The proposal aims to mobilize idle gold holdings, reduce import dependency, and strengthen the economy through better utilization of domestic gold resources.
- 01Malabar Gold's proposal seeks to enhance the Gold Monetisation Scheme (GMS).
- 02The initiative aims to mobilize 1-2% of India's estimated 25,000-35,000 tonnes of idle gold.
- 03Proposed changes include lowering minimum deposit requirements and improving redemption options.
- 04The reforms could potentially release 600-700 tonnes of gold into circulation.
- 05The proposal emphasizes the need for public participation and integration of organized jewellers.
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Malabar Gold & Diamonds has submitted a proposal to the Indian government advocating for significant reforms to the Gold Monetisation Scheme (GMS). The proposal, presented by M.P. Ahammad, the chairman of Malabar Group, aligns with Prime Minister Narendra Modi's call for responsible gold consumption and aims to enhance India's economic resilience. Currently, India imports 700-800 tonnes of gold annually, which strains foreign exchange reserves. In contrast, Indian households and institutions hold an estimated 25,000-35,000 tonnes of gold in various forms, much of which remains idle. The proposal suggests measures to increase public participation in the GMS, such as reducing the minimum deposit from 10 grams to 1 gram, offering flexible redemption options, and integrating organized jewellers into the scheme. These changes could mobilize 1-2% of domestic gold holdings, potentially releasing 600-700 tonnes of gold back into circulation, significantly reducing import dependency and strengthening the economy.
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The proposed reforms could lead to a significant decrease in gold imports, potentially saving foreign exchange and bolstering the economy. This may also provide more liquidity for households and institutions holding gold.
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