Mumbai: The more affluent among India’s temples, churches and mosques are becoming shareholders of companies listed on domestic exchanges.
More than 50 trusts in charge of such places of worship have opened demat accounts in the past few months as a growing number of wealthy devotees are offering shares instead of the conventional practice of donating cash and gold.
In India, shares and securities are held electronically in a dematerialized (or “Demat”) account, instead of the investor taking physical possession of certificates.
The trusts in charge of Mumbai’s Babulnath Mandir, Shrinathji Temple in Rajasthan’s Nathdwara, Swaminarayan Hindu Temple, Shankaracharya Temple and Church of South India are among the religious bodies that have opened demat accounts in the recent past, according to a senior official from a depository.
The move to open demat accounts is partly due to the fact that religious trusts find it tedious to get physical shares dropped in donation boxes transferred to their names. Some of the trusts are now in the process of dematerialising physical shares.
“Out of the over 50 religious trusts opening demat accounts, majority and the more dominant ones are temples. After Tirumala Tirupati, a lot of religious trusts have opened demat accounts with depository participants,” the depository official said.
He estimated the value of shares held to be in crores of rupees. He spoke on condition of anonymity as the information pertained to clients. Tirumala Tirupati Devasthanams, which oversees possibly the world’s richest temple Tirupati Balaji in Andhra Pradesh, was among the first to activate its demat account in 2015.
After the demat account was opened, we are seeing devotees transferring their shares online to the trust,” said a senior official from Tirumala Tirupati Devasthanams.
Vaishno Devi Temple, Shree Siddhivinayak in Mumbai and Vardhman Mahavir Temple have also opened demat accounts, The Economic Times reported.
An official of Shree Siddhivinayak Trust said it had opened a demat account to facilitate donation of shares by devotees but is yet to receive a donation in this form.
The booming stock market and languishing gold prices have prompted rich devotees to give away shares to religious trusts as offerings, said brokers. With values of share portfolios expanding multifold in the past couple of years, the affluent are finding it convenient to offer stocks to these religious trusts.
While trusts supervising places of worship can open demat accounts, such accounts cannot be opened in the name of the deity. In 2011, the Bombay High Court dismissed a petition by Ganpati Panchayatan Sansthan Trust — a private trust for five family deities at Sangli in Maharashtra — to open demat accounts in the name of Lord Ganpati and other gods.
The trust had moved the court against National Securities Depository Limited, which refused to open demat accounts in the name of Gods as it felt that taking action in case of any irregularity would be difficult.
Justices PB Majmudar and RM Savant in their order that such type of demat account cannot be allowed to be operated in the name of deity which not only requires signature while opening of the account but it also requires day-to-day monitoring of transactions in connection with trading of shares.
The trustee can always open an account in their individual name without bringing the Gods and Goddesses into picture, the judges said.
Religious trusts, however, are not allowed to be long-term shareholders in private companies.
Shares of private listed companies can’t be held for more than a year though there are no restrictions on holding shares of public sector undertakings.
Rules mandate that donations received in kind, like shares, have to be realised and invested in instruments such as fixed deposits and government bonds.