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Integrating India with the Global Trade in Gold

“India Good Delivery Rules for Gold & Silver Bars”

Rajesh Khosla is Managing Director of MMTC-PAMP


What does integration mean exactly? Does it mean becoming a center for Gold that looks and feels as others do? It could also mean a Gold market that is equivalent to the developed markets that are straight forward to understand. For India most importantly it must mean a market that has trust and credibility.

The key issue holding India back is quality and conformity. A quality assurance system similar to London Good Delivery that meets Responsible Gold Guidance would be a starting point.

So what development work needed to be done in order to integrate India into the global market?

Following a series of meetings held among various stakeholders, including Refinery Association, MCX, WGC, Assocham, BSE, etc., under the aegis of Indian Bullion &Jewellers Association (IBJA), a consensus first draft of the proposed “India Good Delivery Rules for Gold and Silver Bars” has been formulated. The draft of India Good Delivery Rules includes among others the following: 

  • Specifications for Good Delivery Bars

  • Application procedures for Listing of Refineries

  • Integrated Responsible Gold Guidance

  • Proficiency Testing & Proactive Monitoring

  • Approved auditors for auditing Responsible Gold supply chain.

The draft is modeled on International norms for precision and quality set by the LBMA, on which there cannot be any compromise; the “Indian” element deals with financial and production numbers that relate to an Indian environment. Global quality standard incorporated in the draft India Good Delivery Rules has not been compromised.



IBJA has now posted the draft on its website, and has invited comments from stakeholders across the gold value chain, be it industry practitioners, Banks, Commodity Exchanges, Bullion dealers, Jewellers, Refiners, Industry associations, etc. It has also reached out to the Gems &Jewellery Trade bodies, SEBI, BIS, NABL, Ministry of Commerce, Ministry of Consumer Affairs and Ministry of Finance. The next task is to consolidate all comments received, which the industry-driven committee will consider, prepare and circulate an updated version two of the draft guidelines.

Regulatory stakeholders such as government, tax and regulatory bodies will need to be included to create trust and credibility. The task will include having to persuade them to think about rules that work for everyone in the gold value chain. Too often we see regulations that have unintended consequences for the broader economy because they have been written to only address one issue in one segment of the market.


In all this debate / interaction, one needs an industry body to manage it. That body is the IBJA. It is important to note that while IBJA is the catalytic agent driving change, IBJA is NOT the body that will manage GD. This is made abundantly clear in the preamble to the draft GD rules, which reads as follows:

The list of acceptable refiners of gold and silver bars has been developed and is maintained by (an Industry constituted body yet to be formed, an IBJA supported initiative, hereinafter referred to as “ABC”) in order to facilitate the distribution and acceptability on technical grounds of standard bars produced by those refiners:

(a)  who meet the criteria for inclusion in the list; and

(b)  whose bars have passed the testing procedures laid down by ABC.” 

There is a long way to go. Someone has to take charge and be at the driving wheel for managing the journey. As and when the destination is reached, there must be in place an “industry constituted body, yet to be formed” that will manage and run the GD system.

Two parallel streams of activity; one led by technical insight, the other by bringing industry together.Tall order? Yes. But change comes from within. The gold value chain fraternity is coming together; t
ime for action and creativity, leadership and vision.

The “India Good Delivery Rules” will go a long way to regularize the Bullion Market in India. Make in India will now have significant relevance for the Indian bullion industry, commodity exchanges, banks and the Financial Regulator.

Disclaimer: Views are personal and not the views of the publisher.