India's gold deposit scheme targets temple gold

NEW DELHI (Scrap Monster): The rich temples in India that are said to possess gold worth billions of dollars are likely to participate in the gold deposit scheme announced by the government.

The trust in charge of Shree Siddhivinayak temple in Mumbai- one of the ancient temples in the country has stated that they would consider depositing gold stored in temple vaults at nationalized banks in return for good interest. The temple is said to have nearly 158 kilograms of gold assets worth nearly $67 million. Sri Saibaba Sansthan Temple Trust who manages another rich temple in Shirdi, Maharashtra stated that interest rate will be the key to the temple’s decision. The trusts expect at least 5% interest on gold deposits.

The government is yet to announce the guidelines of the deposit scheme. However, industry sources indicate that the government plans to melt the collected gold and lend it to jewellers. This is likely to reduce the country’s gold imports substantially. According to estimates, gold imports are likely to reduce by at least one-fourth if temples decide to participate in the gold deposit scheme.

The gold deposit scheme is also aimed to mobilize huge stashes of gold held by households. Indian households are believed to have nearly 17,000 tonnes of gold in the form of bars, coins and jewellery. However, the government will have to come up with extremely tempting interest rate in order to convince customers to deposit household gold in the scheme. A similar gold monetization scheme launched in 1999 had turned out to be a failure, having been able to collect only 15 tonnes of gold so far. The scheme had offered 0.75% to 1% interest.

However, a section of devotees have expressed unhappiness over the idea, saying that it is not right on the part of temples to earn interest on gold offered to the gods.