The pilot run of the International Bullion Exchange has been initiated by the International Financial Service Centers Authority (IFSCA). The day IFSCA is established on October 1, 2021 will be the day under the Exchange Authority's Bullion Exchange 2020. A notification in this regard was issued on 11 December 2020. The exchange was announced when the general budget was presented in February 2020.
Gold imports will play a big role
This exchange will be considered as a major gateway for gold imports to India. It is believed that now any gold imported into the country will come under this exchange. India has the highest gold consumption. So this is considered an important step in the exchange and the price set here will determine the price of gold which will be in line with international standards.
It is being said that the fair price of gold will be fixed after this exchange. Gold is currently imported in different ways. India is the largest importer of gold. This is expected to shift a large part of the gold trade from Dubai to India. There are similar exchanges in London, Shanghai and Turkey. This exchange will also keep an eye on what is going on in the gold price world.
Like stocks trading in gold will happen
Gold trading will start like a stock once the gold exchange arrives. Earlier some work was to be outsourced but now it has been decided that everything will be done under the supervision of SEBI. Gold will be traded on the exchange. It is believed that with the existence of gold exchange transparency regarding price and quality will increase.
According to a report, the trading company will be the first to deposit gold in Vault on the exchange. The Vault Manager will then issue an electronic gold receipt (EGR) instead of gold. EGR will be able to be listed on the exchange which means EGR will be very important and you will be able to trade through it. After listing, EGR will be traded as a stock. The clearing and settlement of EGR will be done like shares. Flour will be available from 5 grams to 1 kg in which it can be traded.
This exchange will be followed by the Gold Spot Exchange which will be regulated by SEBI. The rest of the world will also keep an eye on this exchange. An estimated 22,000 tonnes of gold is currently lying idle in Indian homes. According to experts, India consumes 800-900 tonnes of gold annually. International bullion exchanges are expected to have similar gold prices across the country. Today gold prices vary by state. Gujarat International Finance Tech (GIFT) City near Ahmedabad has been selected for this exchange.
What is the plan?
Due to the high consumption of gold in India, the government decided to start this exchange. The IFSCA will also act as the regulator of bullion exchanges. In the year 2019, India consumed about 700 tons of gold. All major banks in the country, government agencies like Gold Exchange Trade Fund (ETF), MMTC will be given bullion exchange membership. Sub dealerships can be given to large jewelers. According to gem and jewelery exporters and bullion experts, gold prices have been fluctuating due to the Corona epidemic. Although there was no demand for gold during this period, there were ups and downs. Prices are determined by the purchase and sale of gold by the US and other international speculators who have nothing to do with India.
