The government has floated the idea of a gold board to ensure coordinated policy action.
The finance ministry held a round of discussions last month with stakeholders and sought their views on a National Gold Board, a body on the lines of the Financial Stability and Development Council. A government official said discussions were on and no decision had been taken yet. Sources said a final decision was likely to be announced in the Budget.
The Financial Stability and Development Council comprises all financial market regulators for coordinated oversight. A similar model is being proposed for gold because bullion-related decisions are taken by the Directorate General of Foreign Trade, the Reserve Bank of India and the customs department. Their lack of coordination was felt a couple of years ago when the government restricted gold imports. Two months after the a gold monetisation scheme was launched, it is yet to take off for the want of several clarifications. According to industry executives, banks, hallmarking centres and gold refiners are set to start signing tripartite agreements. Last month’s meeting called by the finance ministry had two major items on the agenda. The first was creation of the National Gold Board and the second was setting up a gold exchange, which the India Bullion and Jewellers Association and BSE have proposed to do.
The meeting was attended by MMTC, the India Bullion and Jewellers Association, the Gems and Jewellery Federation, the World Gold Council, the Federation of Indian Chambers of Commerce and Industry, and the Indian Institute of Management (Ahmedabad).
FICCI-WGC in their report on a gold policy two years ago had proposed setting up of a gold board or bullion corporation to manage imports, encourage exports and drive development of infrastructure.
Sanjeev Agrawal, a core member of the FICCI gems and jewellery committee and chief executive officer of Gitanjali Export Corporation, said, “The gold board can help streamline implementation of policies and coordination among various decision-making bodies. There is also the need to make gold imports and sale of domestically refined gold transparent.”
He suggested banks importing gold should sell it on the gold exchange and locally refined bullion should also be sold on the bourse within six days of refining.
“This will reduce unwanted imports as idle gold can be lent.”
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