AHMEDABAD: India is the world's second largest gold consumer, yet retail consumers are not very forthcoming to part with their gold holdings.
While households are reluctant, temples of Gujarat are taking the lead in depositing gold for monetization under the Gold Monetization Scheme (GMS) of the Union government.
Estimates by bankers indicate that nearly 200kg gold has been deposited by major temples of the state in public sector banks.According to a study conducted by the India Gold Policy Centre at the Indian Institute of Management, Ahmedabad, merely 0.22% of surplus gold holding in Indian households is monetised under the scheme.
Two temples - Ambaji Temple and Somnath Temple - have cumulatively deposited close to 200kg gold into public sector banks under GMS over a short-term.
This amounts to Rs 120.6 crore worth of gold deposits, according to current prices.Gold price stood at Rs 60,300 per 10 gram in the Ahmedabad market.Speaking on the trend, a senior executive of a public sector bank said, "The government has been encouraging the temples to deposit the gold collected as donations in banks under the gold monetization scheme.
This yields 2.25% interest per annum for medium-term deposits whereas 2.5% per annum for long-term deposits.
It's a win-win for temples because they can redeem the gold at the ongoing market price as their deposits mature and also earn interest.
With growing gold prices, this will only mean more currency in circulation."One of the largest chunks of deposits made under GMS from Gujarat came from Ambaji Temple Trust.
Varunkumar Baranwal, collector of Banaskantha district, who is also on the board of the temple trust, said, "The temple already has deposited 168 kg gold under GMS in three phases including chunks of 96kg and 23kg in two of the phases.
Some 140 kg gold has been used for adorning the temple's spire."Shree Arasuri Ambaji Mata Devasthan Trust, which runs the Ambaji temple in Banaskantha district, often accepts donations in the form of gold via cheques, demand drafts, debit and credit cards and even online and is exempted under relevant provisions of the Income-Tax Act.
Banking sector sources said that the temple's donation box also finds a lot of gold left as donation in the form of jewellery time and again.Somnath temple which has largely used gold accumulated through donations for gold plating the temple spires, has also deposited six kg gold under the GMS.
P K Laheri, trustee, Shree Somnath Trust, said, "Some 150 kg gold has been melted and used for plating the spire of the Somnath temple and decorating it.
The temple trust recently deposited some 6 kg gold in the form of bars under GMS."Most of the funds received by monetising gold are often diverted towards charity and temple operations.Banking sector said that the Ranchhodrai temple in Dakor too receives gold as donations; however, the actual volume could not be independently confirmed.Kamlesh Shah, administrator of the committee of Shree Dwarkadhish Temple in Dwarka, said, "We have never deposited any gold under GMS because there is hardly any donation made in the form of gold at this temple." Gold industry researchers recommend that the Reserve Bank of India (RBI) must make way for incentivising banks for being able to meet the costs and encourage them to launch more such schemes.