One of the most popular temples in India may soon make the first substantial contribution to Prime Minister Narendra Modi’s plan to recycle tonnes of idle bullion to reduce imports and the country’s current account deficit.

Mumbai's two-century-old Shree Siddhivinayak temple is considering depositing some of its 160 kg of gold with banks, according to a spokesman.

The deposit would be a big boost for the gold monetisation scheme that has attracted only one kg in its first month.

“We are planning to melt 40 kg of jewellery with lower purity to make bars and deposit those bars under the gold monetisation scheme,” Sanjiv Patil, executive officer of the temple trust, told Reuters on Wednesday.

A final decision will be made later this month, he said.

Modi launched the scheme to tap a pool of over 20,000 tonnes of gold held by Indian households and temples.

India is the world’s second-biggest consumer of gold after China. The country’s insatiable appetite meant imports of the precious metal accounted for 28 per cent of the trade deficit in the year ending March 2013.

The idea is to recycle the idle gold to meet fresh demand and thus reduce bullion imports, the second biggest expense on the import bill after oil.

Modi wants temples to deposit some of jewellery, bars and coins with banks, in return for interest and cash at redemption. The Centre would melt the gold and loan it to jewellers.

The Siddhivinayak temple has in the past given 10 kg of gold to a bank under an old deposit scheme, Patil said.

“Under the old scheme we were getting one per cent interest. Now banks are offering 2.5 per cent. So we think this is good scheme,” he said, adding that the temple will deposit the jewellery that it failed to auction.

Devotees of the temple mostly seemed to support the decision.

“Once devotees offer ornaments, it is the trust’s decision to decide what is good for the trust,” said Rakesh Kapoor, a New Delhi-based businessmen, who visits the temple every time he is in Mumbai.

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