Prime Minister Narendra Modi will inaugurate India’s first bullion exchange, the India International Bullion Exchange (IIBX), at GIFT in Gujarat on Friday. The exchange, which was announced in Budget 2020, will sell physical gold and silver. According to a report by Indian Express, infrastructural arrangements have already been made to store these precious metals.
“For the first time in India, since the liberalization of gold import through authorized banks and agencies in the 1990s, eligible qualified jewelers in India, as notified by the International Financial Services Centers Authority (IFSCA), have been allowed to directly import gold through IIBX. This reform allows direct participation of qualified jewelers on IIBX for the purpose of importing gold,” the official said in the report.
The exchange will be open to the participation of jewelers with a net worth of Rs 25 crore and above. NRIs and institutes will also be eligible to participate in the exchange after registering with the International Financial Services Centers Association (IFSCA).
How will IIBX work?
Registered jewelers and traders will be able to sell and buy physical gold and silver at the exchange. To do this, they will need to become a trading partner or customer of an existing trading member.
For the same, a branch or subsidiary company should be opened with IFSC. Jewelers who do not have a physical presence in India will also be able to transact metals, but will not be allowed to associate with the customer under them.
The exchange is expected to bring transparency to the pricing mechanism and ensure standardization of financialization of precious metals in India. It will also act as a tool for setting standards for the quality of precious metals.
What will initially be traded on the stock exchange?
In the early phase, 1 kg gold of 995 purity and 100 gram gold of 999 purity will be traded with T+0 settlement period. Further, the stock exchange is expected to extend the settlement period to T+2 days.
Who will lead IIBX?
Ashok Gautam will lead IIBX as Director and CEO. He took over the management in February 2022, and before that he worked with IDBI Bank. He previously worked with State Bank of India (SBI).
The exchange was supposed to be inaugurated in October 2021 but was postponed due to the busy Gujarat summit in January 2022.
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