PM Modi launched country’s first bullion exchange, know how it will work?

New Delhi- Prime Minister Narendra Modi inaugurated the country’s first International Bullion Exchange (IIBX) in Surat on Friday. It is the country’s first international bullion exchange. This exchange is located in Gujarat’s Gift City i.e. Gujarat International Finance Tech-City.

Prime Minister Narendra Modi also visited an exhibition at Gujarat International Finance Tech-City on this occasion. On this occasion, he said that in the last eight years, a new wave of financial inclusion has come in the country. Even the poorest of the poor are joining formal financial institutions. Today, when a large population is connected to finance, it is the need of the hour that government institutions and private players come together and move forward.

Gandhinagar’s International Bullion Exchange (IIBX) offers a wide range of product portfolio and technology services. Its specialty is that its price is much lower than other exchanges in the country and exchanges abroad. Traders can trade gold and silver derivatives on bullion exchanges.

Initially, IIBX expects to trade 1 kg 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 legal tender

Bullion refers to physical gold and silver, which people hold in the form of coins, bars, etc. Bullion is sometimes considered legal tender. Bullion is also included in the reserves of the Central Bank (RBI). Institutional investors also hold it.

The government had notified Bullion Spot Delivery Contract and Bullion Delivery Receipt (BDR) in August last year. IIBX’s regulator is the International Financial Services Centers Authority (IFSCA). Finance Minister Nirmala Sitharaman announced the establishment of IIBX in the Union Budget 2020-21.

How will it work?

Gold and silver will be imported into India through IIBX. Bullion for domestic consumption will also be imported through this exchange. As this exchange, all market participants will get a common and transparent platform for bullion trading. This will help in accurate pricing. Along with this, the quality of gold will also be guaranteed.

In May this year, the RBI had introduced norms for import of gold through IIBX. Through this guideline, domestic qualified jewelers will also get an opportunity to import gold through IIBX. As per the guidelines, banks will provide advance payment facility to eligible jewelers for import of gold through IIBX for 11 days. RBI has also said that payments made by eligible jewelers for import of gold will be made through an exchange approved by IFSCA.

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