In a first, digital precious metals' SRO to seek formal nod from a ministry

The industry body is framing a code of conduct, audit norms. and customer protection standards while seeking formal recognition from ministries, said Chairperson Nirupama Soundararajan

The Digital Precious Metals Assurance Council of India (DPMACI) will aim for a formal recognition from one of India’s ministries such as finance or consumer affairs, said Nirupama Soundararajan, independent chairperson, of the council.

 

The recently-formed association is working on a code of conduct for members of the self-regulatory organisation (SRO). It would include guidelines around 1:1 physical metal backing that are verified through periodic audits of companies and customer protection measures, among others.

 

“We would want some recognition from a ministry which could be finance or consumer affairs. An SRO will function as an industry-driven organisation, but we will work towards securing a formal nod,” Soundararajan told Business Standard in an exclusive interaction.

 

DPMACI represents members of the digital precious metals industry, including fintechs, offering products such as digital gold and silver.

 

It has nine members including distributors and sellers such as MMTC-PAMP, SafeGold, Augmont, PhonePe, BharatPe, Mobikwik, Gullak, Lenden Club and Cred.

 

She said that the association would finalise the code of conduct for its members soon and expects firms to align with the standardised processes at the earliest.

 

Soundararajan added that the association would engage with ministries and regulators to come up with a regulatory framework.

 

“There are a few possible ministries that could potentially spearhead the regulatory framework for digital precious metals. Our part is to engage with the myriad policymakers to see who would be the best fit according to them and us. It involves consensus building within the ecosystem,” she said.

 

She said the association’s code of conduct for companies could evolve to become a starting point of building regulatory frameworks in the future.

 

“The SRO is no way a substitute for regulations. It is a complementary agency. It is a measure that will eventually work with regulators and come up with what we see as a good regulatory framework. As a first step, the agency would ensure its members are accountable and adopt good governance principles and put consumer protection first,” she said.

 

Over the years, specialised fintech firms such as Jar and Gullak along with Paytm, PhonePe and others, have enabled customers to buy fractions of the precious metals, such as gold and silver, making them a popular purchase.

 

The setting up of the SRO comes at a time when markets regulator Securities and Exchange Board of India (Sebi) had, last year, said that digital gold products were outside its regulatory purview.

 

This meant regulators could not inspect fintech platforms’ physical vaults to verify the presence and purity of the gold, as these entities operated outside regulatory oversight.

 

Now, DPMACI is in the process of identifying an independent third-party audit firm to ensure that companies maintain 1:1 physical backing for digital precious metals such as gold and silver.

 

The 1:1 physical metal backing refers to the practice where every unit of the digital precious metal purchased by customers is matched by an equivalent quantity of physical metal held in company vaults.

 

The absence of a regulatory framework governing the physical vaulting of digital precious metals had raised concerns over whether companies were actually maintaining equivalent physical metal holdings.

 

This is particularly true in the event of operational risks.

 

She added that the association would put in place customer protection measures, including timely resolution of customer complaints.

 

The digital gold market has also grown partly due to the ease of purchase through payment methods such as Unified Payments Interface (UPI) on a recurring basis.

 

In March 2026 alone, Indians processed 254.44 million transactions with a cumulative amount of about ₹3,172 crore to buy digital gold through UPI, data shows.

 

This had grown from 64.96 million transactions worth ₹866.43 crore in March 2025, data from the National Payments Corporation of India (NPCI) show.