The bank has also formed a 51 per cent subsidiary, SBI Gold and Precious Metals Pvt Ltd in collaboration with three other banks, and Credit Suisse Financial Products, London as a partner to provide assaying and hallmarking facilities to its customers.

In Mumbai, famous Shri Sidhi Vinayaka Temple Trust became the first depositor of the Bank, Vaidya said and emphasised the purpose of the scheme is to bring privately held gold in circulation for productive uses, reduce the country's reliance on import of the gold and provide its owners with additional income apart from freeing them from the problems of holding physical gold.

Under the scheme, the minimum amount of gold accepted has beenkept at a low level of only 200 gm to enable even smaller depositors to take advantage of the scheme. The deposits are being accepted for periods ranging from 3 to 7 years and the interest offered ranges presently from three per cent to four per cent. Liquidity has been provided through the facility of rupee loans against the gold deposits as also the facility of premature encashment after an initial lock-in period of one year.

The certificate issued under the scheme will be transferable by endorsement and delivery and there is a possibility of development of a secondary market also. The customers will have the option of taking interest annually or on maturity with annual compounding. While the interest is payable in rupee, the depositor will get back the same quantity of net gold as deposited. The depositor will also have to option of encashing principal principal in rupee at the time of redemption at the prevalent prices.

The owners of gold can now bring life to an asset which has remained an idleindulgence all these years for reasons of rituals, status symbols and sentiments. The SBI chairman said the estimated stocks of the country are estimated at around 13,000 tonnes - valued at Rs 6,00,000 crore, which does not contribute to the country's economy in any manner.

Giving statistics on gold consumption, Vaidya said India consumes annually roughly one-fourth of the global production of gold. In the previous year, India consumed 815 tonnes of gold, of which around 80 per cent was imported, causing a drain of precious foreign exchange resources of Rs 30,000 crore annually.

Initially, the scheme will be offered at selected branches and later it would be expanded throughout the country. "We are not only targeting religious trusts, but also individuals as a lot of gold are with them," he said.