Trust in gold

India 10th among countries with gold as part of forex reserves: Business Standard report



My response
June 17, 2019
Trust in gold
This refers to the report “RBI joins peers to buy gold insurance” (June 17). While it is comforting to see that RBI is augmenting the gold component in India’s foreign exchange reserves, efforts to account and mainstream the country’s domestic gold stock is not moving fast. There is urgency in doing this as the measure will bring down the need to import gold which is a drain on our precious forex reserves.
According to media reports, recently Guruvayur temple (Kerala) decided to deposit 350 kg out of its gold stock with State Bank of India which deposit will earn 8.75 kg gold per annum as interest for the temple. Surprisingly, the gold will have to be transported all the way to Mumbai for refining  and standardizing for being accepted as deposit by SBI. Earlier also the temple had deposited gold with the bank. Other temples like Tiruppati and Siddhivinayaka (Mumbai) also have deposited part of their gold stocks with banks. One single deposit of Tiruppati earns interest equivalent to the value of 80 kg gold per annum.
To make gold deposit schemes popular, measures like starting facilities for refining and certification of standard, building public trust in such schemes and incentives for accounting and mainstreaming gold stocks beyond a threshold level with institutions and individuals may be necessary.
M G Warrier, Mumbai

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