The National Stock Exchange, the country’s largest bourse by profits, is keen to set up a spot gold exchange, Vikram Limaye, Managing Director & CEO, has said.
This bourse is also open to getting into tie-ups if required to establish such an exchange, Limaye told BusinessLine.
“We are exploring a spot gold exchange. If tie-up makes sense, we will go for it. Right now, we are looking to do it on our own,” he said.
Limaye pointed out that the government was in the process of framing a new Gold Policy, which among other things could allow setting up of ‘regulated gold exchanges’ in the country.
Finance Minister Arun Jaitley had in this year’s Budget speech announced the setting up of ‘regulated gold exchanges’.
It is widely known that India has gold savings to the tune of 20,000-25,000 tonnes (about $1 trillion), which are lying with various institutions, households, trusts, temples unutilised and unavailable to the Indian economy.
With India continuing to import 800-900 tonnes of gold every year, there are problems of a widening current account deficit, and the fact that these imports mainly get added to the unproductive existing holdings.
A spot gold exchange is seen as a possible route to curb the appetite for imports and encourage Indians to channel their gold savings into the economy. It is reckoned that a spot gold exchange would bring in transparency in gold pricing and boost recycling, which may lead to lower imports.
Commodity trading
Meanwhile, the NSE will from October 1 start trading in futures contracts on bullion, crude oil and metals.
“We will create a separate segment for commodities. We are not setting up a separate platform or a subsidiary for this,” Limaye said.
In the coming days, the NSE will also look at launching futures contracts on agri commodities. Limaye said he has “no visibility” on when the co-location matter would get resolved. As the proposed initial public offering (IPO) hinges on the outcome of the co-location matter, it would be difficult to draw up an exact timeline for the IPO, he said.
“SEBI has completed its work. We have received revised show-cause notices. We have to engage with SEBI on how the matter can be resolved,” Limaye said. He, however, declined to get into specifics on the matter.
Bond market
Limaye also said that one would get to see a lot of action in the development of the bond markets over the next 12-18 months. The RBI and SEBI are working in a coordinated manner and the government is keen to develop bond markets. A dedicated committee is looking into this aspect, he said.
Also read p4