Page 32 - Bullion World Volume 03 Issue 6 June 2023

Bullion World | Volume 3 | Issue 6 | June 2023

Thus, GIFT-SEZ is the first SEZ IFSCA-designated vault managers promote the export of bullion bars
to migrate to the ICEGATE vaults in GIFT-IFSC or other SEZs. through IIBX. IFSCA also plans to
system. facilitating QJs (holding initiate work on IFSC / India Good
TRQ) to import through IIBX at a This expansion of vaulting Delivery norms by incorporating
concessional duty rate of 1% under infrastructure will provide ‘responsible sourcing’ standards set
the India-UAE CEPA. QJs can also convenience to market participants by the OECD covering the aspects
utilise duty credit scrips to pay and ensure efficient trading and of transparency, sustainability,
import duty. These enhancements settlement on the IIBX platform. protection of human rights and
are expected to boost IIBX trading Role of Banks environment. The current India Good
volumes. Similar to the role played by banks Delivery norms are based solely
in other major global exchanges on the BIS technical standards.
Gold loans and other gold-related and markets, IFSC Banking Units Alignment with international norms
investment products through (IBUs) may act as market makers to ensure ethical practices and
IIBX on IIBX and offer bid and ask prices supply chain integrity will increase
IFSCA shall soon be issuing enabling for bullion products to provide acceptability of India’s gold bars
guidelines for Gold Loans / Leasing liquidity. In June 2022, the RBI and assist the GIFT-IFSC's bullion
and investment products in Bullion allowed eligible IBUs of Indian banks ecosystem integration into the global
Depository Receipts (BDRs). As the to become Professional Clearing bullion market.
Government of India (notification Members (PCMs) on the IIBX. This
issued on August 3, 2022) has has strengthened the credibility and Conclusion
exempted income arising out of robustness of IIBX’s clearing and The establishment of IIBX marks the
trading in BDRs from capital gains settlement mechanisms. IFSCA first step towards the GIFT-IFSC’s
tax for non-resident individuals and is working with the concerned development into a comprehensive
foreign companies, IIBX shall pave regulatory / government authorities ecosystem for precious metals. IIBX
the way for greater financialization of to explore the ways to increase the is projected to become a prominent
gold as an asset class. participation of Indian banks’ IBUs, trading hub for physical bullion and
on IIBX as they may play a useful hedging instruments, positioning
Further, with a view to encourage role by establishing the linkages GIFT-IFSC as a viable alternative to
participation, especially from non- with the domestic gold markets existing well-established offshore
resident entities, Gold Exchange through resident entities (including financial services centres.
Traded Funds (ETFs) and Silver ETFs QJs) seeking to import bullion or
linked to BDRs may be introduced on / and hedge their gold price risks
the IIBX. through IIBX. The participation of
Indian banks’ IBUs may also propel
Vaulting Infrastructure at a greater interest from the major
GIFT-IFSC international bullion banks which will
The Government of India amended bring greater liquidity and activity on
the SEZ Rules in July 2022, IIBX.
permitting the IFSCA to regulate
additional vaults in SEZs (beyond Refining:
GIFT-IFSC) across the country that The IFSCA aims to advance
hold gold for sale/trade on IIBX. the GIFT-IFSC as a complete
While trades will continue to be ecosystem for precious metals,
executed on the IIBX at GIFT-IFSC, one that features vaulting, refining,
these vaults outside GIFT-IFSC assaying and testing. The IFSCA is
will be considered IFSC Units for particularly looking to attract global
creating BDRs for trading on the and Indian refining entities that can
IIBX against gold holdings meeting offer financial services based on
specified quality, quantity, and BDRs created against bullion bars
identity parameters held with such manufactured by them. This will also

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