At GIFT City: Pilot trading begins at International Bullion Exchange; formal launch in July

“The trading is being conducted by only a few of the 30-40 qualified jewellers that we have already registered. We plan to begin full-fledged operations by July,” Srinivas added. The pilot transactions began after the Reserve Bank of India (RBI) came out with formal guidelines with regard to importing gold through international exchange on May 25.

The RBI guidelines enable qualified jewellers to import gold through (IIBX) or any other exchange approved by IFSCA and the Directorate General of Foreign Trade (DGFT). For gold imported via IIBX, banks have been permitted to allow jewellers to remit advance payment for 11 days. Banks have also been directed to carry out all due diligence and ensure remittances sent are only for the bona fide import transactions through exchanges authorised by IFSCA. The jewellers have also been asked to submit a Bill of Entry—or any other such applicable document issued or approved by the customs department for evidence of import—to the bank from where advance payment has been remitted.

The exchange that falls under the International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020, notified on December 11, 2020, is expected to be a “gateway for bullion imports into India.” The regulations not only cover the bullion exchange, but includes Clearing Corporation, Depository and Vaults. The first pilot run of the exchange was done by IFSCA chairman in August 2021 and it was expected to go live in October 2021. Thereafter, the formal opening was scheduled during the Vibrant Gujarat summit in January. However, the summit got postponed due to the Covid pandemic.

When asked about the delay in operationalising the exchange, an IFSCA official said, “We were waiting for the RBI guidelines. They got delayed. Second, the first pilot run was meant only to check if the systems set up as part of the exchange were functioning .”

In order to set up and operationalise the International Bullion Exchange, the holding company India International Bullion Holding IFSC Ltd was created.

The National Stock Exchange, Multi Commodity Exchange, India INX International Exchange, National Securities Depository Ltd and Central Depository Services (India) Ltd have come together to create the holding company. The exchange is expected to provide a platform for efficient price discovery and assurance in the quality of gold.