Riddhi bullion, NCDEX to start precious metal bourse

Riddhi Siddhi Bullion (RSBL), one of the leading bullion trading firms in the country, has entered into an agreement with the National Commodity and Derivatives Exchange (NCDEX) to start a spot exchange for precious metals. The exchange would be known as NCDEX Bullion and is likely to be launched within a month.

“RSBL, in collaboration with NCDEX, will roll out a spot exchange for precious metals soon. All the necessary spadework has been done and we hope to start the exchange within a month,” said Prithviraj Kothari, director of RSBL, on the sidelines of a press conference here.

“We will not need any permission from Forward Markets Commission as it is a spot exchange. We are just awaiting the Reserve Bank of India’s (RBI’s) approval,” Kothari said.

The proposed spot exchange will have contracts in dollar denomination, for the first time in India. “However, the settlement will be done in rupee terms”, Kothari said.

RSBL has applied to the RBI for this. The company also plans to bring in bankers to the spot exchange. “NCDEX is not so strong in the precious metals category. RSBL already has a strong physical infrastructure and network due to its electronic over-the-counter (OTC) platform for trading in bullion items.”

Kothari said RSBL has delivered 15 tonnes of gold in the last one year through its online OTC platform. RSBL spot OTC platform was launched in March 2008.

The bullion trading company has a total of eight delivery centres across the country, which include two rolled-out centres in Surat and Rajkot. In addition to this, RSBL plans open six more centres in cities such as Kochi, Delhi, Kolkata, Vadodara and Bhavnagar.

“Currently, delivery of silver is available only at thee centres — Mumbai, Ahmedabad and Chennai. Eventually, we intend to start silver deliveries in all our centres,” said Samir Shah, vice-president, business development, RSBL.

In order to further strengthen its association with NCDEX, RSBL has come up with a scheme wherein customers registered with it before April 9, 2009 will be given free membership of NCDEX. As on date, the number of customers with RSBL is 500.