Page 8 - Bullion World Volume 4 Issue 10 October 2024

Bullion World | Volume 4 | Issue 10 | October 2024

Indian Banks and GIFT City: Transforming the

Future of the Global Precious Metals Market

Mr Pradeep Ramakrishnan
Executive Director, Department of Metals and Commodities, IFSCA

intervention phase and the transparency phase after
independence . The steps taken by government of India
especially in last 10 years has been focused towards
creating transparency and efficiency in the precious
metal’s ecosystem.

It is well recognized that banks are crucial in
development of a dynamic precious metals ecosystem,
participating both indirectly as clients of exchange
members, such as those on CME Group (COMEX), and
directly as members of exchanges like the Shanghai
Gold Exchange (SGE). Additionally, they play an active
role in the Over-the-Counter (OTC) market, facilitating
the clearing of precious metals through unallocated
accounts in markets such as London.

Gold transactions are inherently high-value and
necessitate a deep understanding of risk management
and counterparty risk. Banks, with their substantial
Mr Pradeep Ramakrishnan balance sheets and extensive experience in holding
positions, hedging, and financing within the precious
India is the second largest consumer of gold importing metals market, are pivotal stakeholders. Moreover,
around 746 tonnes of gold in the year 2023 . The gold central banks and investors typically prefer to purchase
market in India has evolved over decades, which went bullion through banks that specialize in bullion
through different phases including the restriction phase, operations, including the management of treasury and
the prohibition phase, the liberalization phase, the asset-liability functions.

Source:
1. https://www.gold.org/goldhub/data/gold-demand-by-country
2. https://www.iima.ac.in/publicationglittering-paradox-unveiling-indias-gold-policy-evolution-and-its-enduring-flaws#:~:text=The%20
Glittering%20Paradox%3A%20Unveiling%20India's%20Gold%20Policy%20Evolution%20And%20Its%20Enduring%20Flaws,-
Ramakrishnan%20Padmanabhan%2C%20Chandan&text=In%20recent%20years%2C%20despite%20reforms,lack%20of%20
clear%20government%20direction.
3. https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=12606

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