New Delhi: Prime Minister on Friday inaugurated the country’s first International Bullion Exchange (IIBX) in Surat. This is the country’s first international bullion exchange. This exchange is located in GIFT City of Gujarat i.e. Gujarat International Finance Tec-City.
PM also saw an exhibition in Gujarat International Finance Tec-City on this occasion. On this occasion, he said that in the last eight years, the country has witnessed a new wave of financial inclusion. Even the poorest of the poor are joining formal financial institutions. Today, when a large population has joined finance, it is the need of the hour that government organizations and private players move together.
The International Bullion Exchange (IIBX) of Gandhinagar offers a wide range of products portfolio and technology services. Its specialty is that its cost is much less than other exchanges in the country and exchanges abroad. Traders can deal in gold and silver derivatives on the bullion exchange.
Initially, IIBX is expected to trade in 1 kg of gold of 995 purity and 100 grams of gold of 999 purity with T+0 settlement. All contracts on this exchange are listed in dollars. Their settlement will also be done in dollars.
Bullion is considered a legal tender
Bullion means physical gold and silver, which people keep with them in the form of coins, bars etc. Bullion is sometimes considered a legal tender. Bullion is also included in the Reserve of the Central Bank (RBI). Institutional investors also keep it with them.
The government notified the Bullion Spot Delivery Contract and Bullion Delivery Receipt (BDR) in August last year. The regulator of IIBX is the International Financial Services Centers Authority (IFSCA). Finance Minister Nirmala Sitharaman had announced the establishment of IIBX in the Union Budget 2020-21.
How will this exchange work?
Gold and silver will be imported into India through IIBX. Bullion for domestic consumption will also be imported through this exchange. In the form of this exchange, all the market participants will get a common and transparent platform for bullion trading. This will help in correct pricing. Along with this, the quality of gold will also be guaranteed.
RBI had introduced norms for the import of gold through IIBX in May this year. Through this guideline, domestic qualified jewelers will also get an opportunity to import gold through IIBX.
According to the guidelines, banks will provide the facility of advance payment to qualified jewelers for gold imports through IIBX for 11 days. RBI has also said that the payments made by qualified jewelers for gold imports will be through IFSCA-approved exchanges.
