Bullion Industry

Bullion Industry

Prithviraj Kothari RiddiSiddhi Bullions Ltd.

Importance of Bullion • Savings & Investment medium for majority of Indians – Rural and Urban • Over Rs 30,00,000 crores ($650bn) in savings • Annual turnover of over Rs. 300,000 crores • All physical gold and silver trades change around three hands

My query to commodity exchanges • Which commodity contributes to the maximum revenue to your exchange? How much percentage of overall revenue? • What have you done for development of participants from this industry?

Commodity Exchanges • Lion’s share of revenue from gold and silver • Only commodities to have smooth delivery mechanisms

Employment • Jewellery Industry is one of the most important labour intensive industry which has survived • Jeweller / Bullion dealer is one of best paymasters in smaller towns

International • LBMA daily clearing volumes for Gold - $18.8 bn Silver- $ 2.03 bn • Gold investments have always been ‘flight to safety’

My query to the Reserve Bank • What returns do you get from your foreign exchange reserves? • Where do you place gold and silver in your investment portfolio?

RBI Forex Reserve • Increase share of Bullion in Reserve • Be active in Managing Gold Reserve • Silver to get a fair share in Reserve • Minimum share of bullion in Reserves: Gold – 5% (600 tonnes) Silver – 1% (7500 tonnes)

Use of Reserve • Bullion Stock with ‘Custodian’ • Use as ‘Base Stock’ for Trade • Increase share of world ‘Speculative Trade’

My query to the BBA • Is gold an untouchable commodity? Why is gold and silver discriminated in imports and exports despite being God’s own currency? What efforts has BBA put in towards solving this? • What efforts have you put in towards solving infrastructure in the ‘Zaveri Bazaar’?

Bullion Imports and Exports • Free Imports of Gold and Silver • Exports of Gold & Silver Refund of duty levied & other taxes levied Or duty free entitlements

Supply to SEZs • Bullion supply to SEZs • Entitlement for Duty Drawback Benefits • Refund of all Local Taxes

Silver Reforms • Allow forward bookings through banks and International Exchanges • Encourage Silver loans

My query to All banks • Why is it that there is no financing against security of gold? • Why don’t bullion dealers qualify for gold and silver loans?

Finance • Removal of Ban on Financing against Gold • Establish acceptable Financing (Banking) norms for Gold and Silver • Encourage Collective Savings

Infrastructure • Assayers • Refiners • Custodians

CAUTION… • Old Evil Gold & Silver smuggling Removed through reforms and easy imports • Present Evil Gold & Silver Futures / Forward trade ….. -- need reforms to control

How do we take it up? The organizers, the associations and the exchanges should together meet the regulators atleast once every year after the conclusion of this convention to make sure that we just don’t end up ‘only presenting and talking …. but acting on the same……….’