India’s Prime Minister Wants to Tap Massive Gold Stash

November 5, 2015, 3:41 PM UTC
Indian Prime Minister Narendra Modi gestures as he addresses a ceremony at the launch of "Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT)' in New Delhi on June 25, 2015. AFP PHOTO/STR (Photo credit should read STRDEL/AFP/Getty Images)
Photograph by Getty Images

India has more than four times the amount of gold held in Fort Knox, and Prime Minister Narendra Modi reportedly wants to put it to use.

Modi announced a gold-deposit plan on Thursday to tap into what he says are India’s 20,000 metric tons of gold stockpiled in temples and people’s homes. (There about 4,500 tons of gold in Kentucky’s Fort Knox, according to Bloomberg.) Modi wants to put the gold to use in India’s financial system to curb purchases of the precious metal from other countries while boosting his nation’s economy.

India rivals China as the world’s biggest gold-consuming country, Bloomberg notes, which is why Modi would prefer to address his nation’s physical demand for the commodity internally. In three plans laid out Thursday, the Prime Minister proposed allowing investors to deposit at least 30 grams of gold with banks. The gold could later be redeemable with interest as bullion or cash. Banks would then be able to sell or lend the deposited gold, increasing market supply.

Modi also proposed minting coins with the Indian gold, which would bear the image of Mahatma Gandhi.

The Indian Prime Minister recently visited the U.S. and attended a Fortune-hosted dinner where he met with several Fortune 500 CEOs and discussed ideas for stimulating economic growth in India.