Malabar Gold & Diamonds has submitted a detailed proposal to the government suggesting key improvements to the Gold Monetisation Scheme, aiming to encourage greater public participation and bring idle household gold into the formal economy.
The proposal was sent by Chairman M. P. Ahammad to Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal. It supports Prime Minister Narendra Modi’s call for responsible gold consumption and highlights the need to reduce import dependence by better using India’s existing gold reserves.
India currently imports around 700–800 tonnes of gold every year, which leads to heavy foreign exchange outflows and adds pressure on the current account deficit. At the same time, Indian households are estimated to hold nearly 25,000–35,000 tonnes of gold in the form of jewellery, coins, and bars, much of which remains unused in economic circulation.
The company argues that improving recycling, exchange, and monetisation of domestic gold can significantly reduce import reliance and strengthen financial stability over time. It also notes that even a small portion of these holdings entering the system could meaningfully reduce import demand.
However, the proposal points out that adoption of the Gold Monetisation Scheme has been limited due to issues such as long lock-in periods, low returns, restricted flexibility in redemption, and procedural complexity.
To address this, Malabar Gold has suggested several reforms, including allowing organised jewellers to participate under regulatory supervision, reducing the minimum deposit requirement from 10 grams to 1 gram, offering flexible redemption in cash or gold, shortening lock-in periods, and simplifying e-KYC processes.
It also recommends a jeweller-assisted collection system with digital tracking and transparent processing to improve trust and efficiency.
According to the company’s estimate, even mobilising 1–2% of India’s privately held gold could release around 600–700 tonnes into circulation, potentially offsetting a significant portion of annual imports.
