Page 36 - Bullion World Volume 02 Issue 08 August 2022

Bullion World | Volume 2 | Issue 08 | August 2022

(NSE owning 15% and other institutions owning the Mr Harish Chopra: Manish, how do you see banks
remaining. BSE and MCX can also participate in this). continue working capital financing and other
The balance of 49% will be owned by the industry. services?
For the first time, we are introducing the concept of a
depository. With IBJA we are planning an awareness Mr Manish Gavaskar, Senior VP
programme. We believe the new system will change & Head-Bullion Sales, Ratnakar
the entire delivery ecosystem, especially the B2C Bank Ltd: Banks have played
segment. a variety of roles in serving the
needs of customers in the current
In the proposed exchange, there are going to be B2B market. Even under IIBX and
as well as B2C segments where EGRs would be traded. DSGE, banks will support and
At present, SEBI’s regulations are more toward B2C. play a variety of roles. PCM at
We will work with SEBI on EGR utilization for B2B. IIBX is known to all. Likewise, it will evolve as with the
evolution of the market.
Mr Harish Chopra: Ranjith, continuing the same
subject, what do you think is a good business Mr Kumar Parmani: As of today, banks enable
proposition for BSE? importation, provide a working capital loan, run Gold
Metal Loan books, and also provide loans for CAPEX.
Mr Ranjith Singh, Head- Going forward, if there is an exchange model, banks
Commodities, BSE: Let me at the would provide an extra line of service as permitted by
outset thank SEBI for giving us the the regulator and as demanded by customers.
permission. We will start DSGE
as a segment of BSE. We have Mr Harish Chopra: Sriram sir, do you have enough
already conducted mock testing. information on IIBX and DSGE?
SEBI did their checking last week.
Once we have all approvals in Mr A S Sriram: Not yet. But I think we will get all
place, and clarity on some of the taxation issues, we the information very soon. I would like to focus on
will start. As far as viability is concerned, we see good the capital gains tax aspects related to exchanging
potential. The official import number is about 1000 old gold jewellery with new gold jewellery. Here the
tonnes a year. We are promoting this as a SIP option buyer has to pay capital gains tax on the difference
for retail investors as well. For jewellers, we are looking between the purchase price and the resale price. If
at it as a kilobar product. the capital gains are exempted, then it will enable the
flow of old gold jewellery into the system and in some
Mr Harish Chopra: Deepakji, Kundan also has a ways will reduce the import requirements. We have
digital gold business. How would DSGE affect similar exemptions on capital gains on the sale of land
Kundan’s digital gold business? or building if the proceeds are reinvested in land or
building within a specified time. The regulator should
Mr Deepak Gupta: EGR will work for limited hours. kindly look into this and permit the same.
Digital gold is 24*7. So, in our view, it will co-exist.
NK: In digital gold, the key is the bid-ask spread. Mr Harish Chopra: Dubai has introduced some
Current spreads are very large. As against that, stringent measures on responsible sourcing. What
the bid-ask spread in gold ETFs (Exchange-traded is the plan of exchanges in India?
products) is very narrow. Also, in a regulated
environment, there are mechanisms to incentivise Mr Nagendra Kumar: From an operational point
the channel. So, over a period of time, the digital gold of view, if all three exchanges operate the same
volume will shift to exchange. contract (EGR) and if the same refiner is empanelled
with all exchanges, then we need to standardise the
Mr Shivanshu Mehta: I agree with Nagendra’s point. accreditation norms. Else, we will run into serious
Our gold petal contract saw the delivery of 61,000 challenges.
units. Like-wise, 130 metric tonnes of silver were
delivered against the silver one-kg contract. So, To be continued in next issue - Discussion on
exchange-traded products have an inherent advantage Tech-backed gold products & more on IGC 2022
in terms of liquidity.

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