Amfi chief raises custodian issue

The launch of Gold Exchange Traded Funds (GETFs) in India was getting delayed owing to the absence of an appropriate custodian for safe keeping of the underlying asset, said A P Kurian, chairman of Association of Mutual Funds in India (Amfi).

"This is not cash market, where securities are kept in the electronic form by NSDL and CDSL. Here, you have to buy gold, and keep in safe custody. How do we keep? There is a certain custodian issue," he said, speaking on the sidelines of a seminar here.

Kurian said investors would have to bear the cost of keeping gold in safe custody.

He said the Securities and Exchange Board of India was in search of a cost-efficient custodian for the GETFs. At least three mutual fund houses including Benchmark and UTI Mutual Fund have filed draft documents with Sebi to launch GETFs.