Mumbai's Siddhivinayak temple promises to deposit 40 kg gold in Modi's monetisation scheme

Zee Media Bureau

Mumbai's two-century-old Shree Siddhivinayak temple, which is devoted to the Hindu elephant-headed god Ganesha, has decided to move 40 kg of its gold reserves towards the PM Narendra Modi's government Gold Monetisation Scheme (GMS).

This move is likely to earn the temple nearly Rs 67 lakh in interest annually.

Under the scheme, banks will collect gold for up to 15 years to auction them off or lend to jewellers from time to time. They will pay 2.25-2.50 percent interest a year, higher than previous rates of around 1 percent.

The Shree Siddhivinayak temple auctions gold jewellery donations and collects an additional 10 percent from the highest bidder, while it will miss out on that if gold is deposited with bank.

The temple has 160 kg of gold and is partly plated in the precious metal.

Some other rich temples, such as the Padmanabha Swamy Temple in Kerala, where a treasure estimated then to be worth over USD 20 billion was discovered in secret vaults in 2011, are stuck in legal disputes and cannot participate.

The government is trying to persuade rich temples to deposit some of their gold hoards with banks to revive a plan to recycle tonnes of the precious metal and cut gold imports, sources said.

The scheme has only attracted about one kilogramme in a month, prompting the government to nudge temples through banks to hand over their treasures, the sources said, but at least one temple said it was still unconvinced by the plan.

India is the world's second-biggest consumer of gold after China and the country's insatiable appetite meant imports of the precious metal accounted for 28 percent of India's trade deficit in the year ending March 2013.

In a bid to reduce the economically crippling imports, Prime Minister Narendra Modi launched the much-publicised scheme to tap a pool of more than 20,000 tonnes of gold lying idle in homes and temples.

India's temples have collected billions of dollars in jewellery, bars and coins over the centuries, hidden securely in vaults, some ancient and some modern.

Modi wants temples to deposit some of this with banks, in return for interest and cash at redemption. The government would melt the gold and loan it to jewellers.

With Agency Inputs