Page 11 - Bullion World Issue 1 May 2021

Bullion World | Issue 01 | May 2021

while making sure the governance, Units (FBUs) operating out of IFSC to
technological prowess are the key open unallocated bullion accounts with
pillars on which it is built. IBE will help authorized members of the London “ With more refiners
integrating India’s gold trading with the Precious Metal Clearing Limited. This getting themselves
international gold community making will enable the participants to carry
it a trading and vaulting hub. It will out derivative transactions and will be prepared to comply
also facilitate standardization of gold instrumental to provide liquidity at IBE with OECD guidelines
inflows into India and creating a robust by facilitating trading, hedging and
regulatory scaffolding for bullion trade. swapping. It will also help the Indian on responsible
IBE shall strike an equilibrium to reduce Banking Units to structure their gold sourcing, the
the market inefficiencies that exist in lending and savings products. It will also
the Indian bullion trade by creating a help in extending the financing facilities domestic refinery
transparent platform for bullion trading. to refiners and traders.
landscape looks
It is envisaged to achieve efficient price Refining – With a view to promote promising. ”
discovery, quality, and services, at par refining of gold within India, the Bureau
with international standards. The Indian of India Standards (BIS) notified the
companies shall be greatly benefitted India Good Delivery norms for bullion.
with the setting up of their foreign Now it is up to the market players to
subsidiaries in the deemed foreign develop a mechanism that facilitates
territory which greater acceptance of Indian refined
gold. The initiatives by India’s domestic
shall facilitate import and export between Exchanges viz. National Stock Exchange,
the Indian entity and their foreign BSE and Multi Commodity Exchange We feel it is just a start in the right
subsidiary. The IBE shall be seen as an of on-boarding local refiners are worth direction.
initiative to bring transparency in the mentioning. With more refiners getting
Indian precious metals trade by the FATF themselves prepared to comply with Hallmarking - On 15th January 2020,
in its 2021 review. OECD guidelines on responsible Department of Consumer Affairs issued
sourcing, the domestic refinery a gazette mandating that effective
Development of Domestic Bullion landscape looks promising. 15th January 2021 all jewellery sold
Exchanges – Budget 2021 paved the in the country must be hallmarked.
way towards formation of domestic gold Taxation – Custom duty on imported Due to COVID pandemic, the deadline
spot exchanges and appointed SEBI as gold bars and dore was raised in the has been extended to 1st June 2021.
the regulator for the same. The domestic Budget 2020 to 12.875% and 12.21% Jewellers will only be allowed to sell
bullion exchanges (DBE) will take over respectively. The same has been 14, 18 and 22 carats of gold jewellery.
the transactions once the gold traded rationalized in the recent Budget 2021. Any violations in compliance with
at International Bullion Exchange (IBE) The total duty now stands at 10.75% the hallmarking norms would attract
is imported into the domestic market. and 10.09% on gold bars and dore penalty. Hallmarking will protect the
In a way, it will complement the trading respectively after the inclusion of Cess. consumers and create a level playing
operations at the IBE. In addition, DBE field for the jewellers who were already
will also facilitate with a channel to sell The lower import duty will not only complying with the hallmarking
recycled gold. support demand but also reduce provisions. Mandatory hallmarking
Unallocated accounts – In March unofficial imports. More importantly, it will help in bringing standardization
2021, IFSCA allowed Indian Banking will support organized trade by making in the quality of gold and create an
Units (IBUs) and Foreign Banking unofficial trading lesser attractive. atmosphere of trust which we feel is
very critical for the development and
sustainability of bullion industry. From
what we understand this is going to be
technologically intensive and fool-proof
mechanism is being developed to
prevent any fraudulent hallmarking.

“ The IBE shall be Recycling and GMS - On 9th
February 2021, The Department of
seen as an initiative
Economic Affairs, Ministry of Finance
proposed various amendments in
to bring transparency the Gold Monetization Scheme and
in the Indian precious Gold Metal Loan through an office
memorandum. It will be followed by
metals trade by RBI, SEBI and IFSCA issuing necessary
notifications and master directions.
the FATF in its 2021 The proposed amendments put a lot
”
review. of emphasis on integrating Jewellers

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