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India's Richest Temple Backs Gold 'Monetization' Scheme

Bank interest already being converted into bullion for Tirumala temple's 4.5-tonne gold deposit...
 
INDIA's richest temple says it already holds gold on deposit with commercial banks, converting the interest into additional bullion in news likely to support the government's drive to 'monetize' some of the country's huge private gold holdings and so reduce new imports of the precious metal.
 
Officials from the Tirumala Tirupati Devasthanams plan to increase the temple's existing gold deposits, they said last week, adding another tonne to the 4.5 tonnes – worth some $150 million at current prices – placed with various institutions including the State Bank of India over the last five years.
 
Heavy gold bullion imports to India – the world's largest consumer market for the metal – were widely blamed in 2013 for the country's current account deficit crisis and plunging Rupee.
 
Rolling back some of the anti-import measures then imposed, the BJP government elected last year formally proposed a 'monetization' scheme based on gold deposit accounts with commercial banks in its 2015 Budget.
 
Details are now being finalized, with full launch due in September according to Finance Ministry 'sources' cited by India's press.
 
Receiving huge sums in donations each year, India's temple trusts must " think like endowment funds" according to the government, which has faced resistance and concerns over its plans to 'monetize' devotional gifts. Now announcing new online payment facilities for festive donations from pilgrims, D.Sambasiva Rao – executive officer at the Tirumala Tirupati Devasthanams – told the Times of India on Friday that since 2010 some 4.5 tonnes of gold given to the TTD "has been deposited in various banks including the State Bank of India, Indian Overseas Bank and Corporation Bank.
 
"We plan to deposit another tonne gold in SBI shortly."
 
Reporting the news, "the temple administration converts the interest amount too into gold," says the Times of India, "which is then added to the pile already there with the banks."
 
Estimates say India's households and temples own some 16,000 to 22,000 tonnes of gold between them, perhaps accounting for one ounce in every 10 ever mined in history.
 
Mobilizing some of that metal – and melting it down to lend onto the jewelry industry for new products – is aimed at cutting India's heavy current account deficit, now shrunk from 5.0% of GDP in fiscal year 2012-2013 to as little as 0.2% in the final quarter of 2014-2015 as the price of gold has fallen sharply with crude oil, which India also has to import because it lacks domestic supplies.
 
Situated in the south-eastern state of Andhra Prades, the Tirumala temple also announced details last week of a 'demat' brokerage account into which devotees can donate stocks and bonds directly, opened at the Stock Holding Corporation of India.
 
TTD receives some 30-40 million pilgrims a year. Its total gold ornament and jewelry holdings are estimated at the equivalent of some $11 billion.

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