The National Stock Exchange (NSE) has announced plans for setting up a domestic spot gold exchange in collaboration with India Bullion and Jewellers Association Ltd, a report by Livemint stated. It added that the new exchange will be overseen by the market regulator Securities and Exchange Board of India (SEBI).
As per the report, the collaboration aims to bring efficiency and transparency to bullion pricing in India. Advanced discussions are on to close the shareholder structure, it added.
This will be the first time that a domestic bullion spot exchange is being set up in the country.
Currently, the Central Bank allows some domestic banks to import gold who sell it to bullion dealers, who further sell to jewellers before going to retail.
"This exchange is conceptualised taking into consideration the industry requirements and will integrate transactions of bullion dealers, jewellers, retailers and consumers on one single platform," Prithviraj Kothari, National President, IBJA, said as reported by Livement.
The report further highlighted that the collaboration will bring a platform for industry players for spot market bullion transactions and will act as a step in the direction of allowing consumers and investors to directly participate on the exchange platform. The exchange will allow jewellers, retailers, refiners and banks to trade over a regulated platform.
However, as per the report, the date of launch or the date when the exchange will start operating has not been specified by the NSE.
"This exchange shall bring in efficiency as well as transparency in the price discovery of bullion," the report quoted NSE Managing Director and CEO Vikram Limaye.
China is the top consumer of gold and it also operates a similar exchange where all domestic production and imported gold is bought and sold. India is the second-largest consumer of gold.