Page 16 - Bullion World Volume 02 Issue 08 August 2022

Bullion World | Volume 2 | Issue 08 | August 2022

2. It is envisaged that hedge the gold loan transactions they refiners could range between 50
funds shall look to purchase undertake in the OTC market, on an lakhs to 250 crores and capacity to
gold and silver from IIBX which exchange platform with necessary refine gold bullion anywhere between
has the backing of the actual modifications. 8 tonnes to 300 tonnes per annum.
bullion bars which are stored This means an annual capacity of
in regulated vaults in IFSC and Further, once the T+0 contract easily 2000 tonnes can be expected
other SEZs. mainly for facilitating the gold from these refiners. However, out
3. With this, IFSC is expected to import by QJs in India gets a firm of this list, most of the refiners
become the bullion storage hub footing, the IFSCA shall look to take are accredited by BIS technical
primarily and initially for South calibrated steps towards introducing standards.
Asia & South East Asia region other contracts, including derivatives
and may be of the World. contracts, in consultation and Thus, not many amongst these
4. IFSCA expects large scale coordination with the domestic refiners have been associated
participation from funds on Gold regulators such as the RBI and SEBI with Responsible Sourcing as
and Silver ETFs as and when and other stakeholders. per the OECD-DDG guidance. It
they absorb the regulations is imperative that these refiners
which are already in place. I would like to provide some more associate themselves to the norms
5. Activities such as bullion leasing, insight into IFSCA’s future plans on under the Five Step framework of the
gold loans, financing against the development of a comprehensive OECD.
BDRs, project financing for doré precious metal ecosystem, in the
(raw gold) and Gold Savings medium to long term. India must leverage these capacities
accounts /Gold accumulation which are already in place and build
plans, etc., can further lead to 1. IBUs as Trading members new capacities at GIFT-IFSC to
making GIFT-IFSC as a hub for IFSCA is aware that banks across encourage it to become a refining
various Gold related products. the world play a key role in the and storage hub of the world’s gold.
precious metals business which .........................................................
Even as IIBX has facilitated some include various components such Conclusion:
transactions of import by QJs during as gold savings accounts, gold The journey of IFSC with the launch
the trial phase, we are looking deposits, financing, trading both of the India International Bullion
to provide more clarity through proprietary and on behalf of their Exchange has only begun and on a
SOPs and guidelines including customers, & treasury management right footing.
those related to enabling a remote (ALM, risk etc.).
access – limited purpose mode We hope to scale newer heights to
of participation by certain QJs on We have already enabled the bank’s create a precious metals ecosystem
the buy side and certain suppliers branches i.e., the International as part of a broader financial system
on ‘sell’ side – based on some Banking Units to become trading in IFSC to support the evolution of
additional eligibility criteria. While cum clearing members of the IIBX, a gamut of financial products and
we expect that at least a few IFSC apart from the Broker-Dealers on services helping the investor find
Banking Units of foreign banks will IFSC stock exchanges grandfathered appropriate value at a competitive
soon see value in becoming TCM/ as TCMs on IIBX. Apart from some cost when compared to other
TMs on IIBX, we’d like to provide the IBUs of foreign banks, we expect financial jurisdictions.
additional facility of remote access, that if and when the RBI permits,
with proper safeguards and risk some IBUs of strong Indian banks We hope that after 10 years when
management in place, to ensure an may also become TMs / TCMs on we look back, we see the peaks
early participation by a wider set of IIBX. scaled were focused on helping India
eligible entities. achieve greater integration with the
2. Export from Domestic Area through global financial markets.
We’d also like to formulate a gold existing refining capacity
leasing framework through IIBX so In India, there are 41 refineries I thank the audience for a patient
that the QJs as well as the financiers certified by the Bureau of India hearing. And once again a big
/ suppliers may be able to replicate Standards (BIS). The Capex of these thanks to the organisers.

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