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New gold policy likely to encourage ‘bullion banking’: WGC India

The World Gold Council (WGC) sees gold becoming a strong ‘financial asset’ in India once the Centre rolls out its proposed comprehensive gold policy this year, a top official said.

According to the new policy, banks will be allowed to do ‘Bullion Banking’ (take risk in bullion) and new infrastructure such as spot exchanges would be a reality, ushering in transparency and thereby benefiting consumers and small jewellers in particular, PR Somasundaram, Managing Director-India, WGC, told.

Bullion banking will enable consumers to do bullion-related transactions with banks with ease. Spot exchange will solve for liquidity in the market.

“This upcoming gold policy, which we expect to get unveiled by the government very soon, will have positive impact on our exports. It will not have any immediate impact on demand, but will improve sentiment,” said Somasundaram.

It may be recalled that a draft policy for promotion of gold as a financial asset has already been circulated to relevant Ministries for comments, and a proposal to set up a gold exchange is under consideration by the government.

“Our belief is that after the NITI Aayog report, the work for new comprehensive gold policy is in the last lap. It should be a reality very soon,” Somasundaram said.

Somasundaram also highlighted that the upcoming gold policy is not just driven by India’s needs. “We are looking at a policy not just for Indian market. We are looking at a policy for an international gold market with 25 per cent of demand coming from India,” he said.

Courtesy- Business Line



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