Gold miners’ body World Gold Council (WGC) has counseled that the Indian government launch bullion banking by carving the niche bullion business out of the core banking system to herald additional transparency in business. The move would possibly facilitate unlock regarding $500 million within the price chain, it said.
As of now, banks import gold and lend as gold metal loans. So, bullion banking is confined to one or two companies. Going forward, once the government announces and implements a gold policy and introduces additional reforms, together with a spot exchange, banks’ role ought to expand to purchasing gold instead of solely commerce.
Bullion bank, per WGC, ought to undertake retail rural credit, besides wholesale banking and credit. As a part of company and institutional business, banks ought to even be allowed to control mercantilism platforms, do proprietary mercantilism, deal in structured merchandise and conjointly float exchange-traded funds, WGC recommended.
In a report titled ‘The would like for bullion banking in India’, the WGC has outlined the bullion bank, that facilitates the acquisition, sale, and usage of standardized bullion by giving funding and sales and mercantilism services to participants within the bullion market. The bank so came upon ought to supply strictly gold-linked services like bank account, mounted deposit, accumulation plans, life assurance, inter-bank borrowing, reserve assets bonds, gold validation theme, gold metal loan, more funding and loan against bullion, to call a number of.