NSE partners with Augmont to strengthen India's Electronic Gold Receipt ecosystem
Mumbai, July 15
The National Stock Exchange of India has entered into a strategic partnership with Augmont Enterprises Limited to strengthen the Electronic Gold Receipts ecosystem in India, as per a statement by NSE.
The partnership seeks to bolster the exchange-regulated spot gold market by enhancing EGR creation, redemption, liquidity, delivery and price discovery.
"Through this partnership, the two organisations will work towards increasing market participation, improving liquidity and facilitating the adoption of EGRs among investors, jewellers and other market participants," the release added.
Speaking at the bell-ringing ceremony on Wednesday, NSE Managing Director and CEO Ashish Kumar Chauhan said the exchange's Electronic Gold Receipt (EGR) platform offers a SEBI-regulated marketplace where physical gold can be converted into a dematerialised security and held in the same demat account.
"This framework is open to all eligible participants, and we welcome every refiner, vault manager, jeweller, and intermediary who meets the standards to come forward," he noted.
India Bullion and Jewellers Association (IBJA) National President Prithviraj Kothari said India holds an estimated 30,000-35,000 tonnes of gold, making it one of the largest private gold reserves globally, but much of this wealth remains economically inactive.
He further said that India is setting up the India International Bullion Exchange (IIBX) for the offshore market, while SEBI has already notified the framework for Electronic Gold Receipts (EGRs) for the domestic market.
"EGR (Electronic Gold Receipt) has the potential to unlock enormous value for India. If even a small fraction of the gold lying idle in our homes enters a transparent and regulated ecosystem, it can improve liquidity, strengthen formalisation, support financing, and reduce our dependence on fresh gold imports," it said.
Ketan Kothari, Director and Founder of Augmont Goldtech Private Limited, said Electronic Gold Receipts could transform India's gold financing ecosystem by enabling consumers to convert idle gold, bars and coins into EGRs and lend them to manufacturers through the Securities Lending and Borrowing (SLB) platform. By doing this, "Customer will earn an interest, manufacturer will pay an interest," he said.
Further noting the largest tokenised gold platform has an AUM of USD 3 billion, Kothari estimates EGRs will have a 100x AUM in the coming years.
— ANI
Reader Comments
Good move by NSE, but I'm skeptical. Remember all the gold loan scams? I hope SEBI and NSE have tight regulations. Demat gold sounds cool, but what if the vault runs away? 😅 We need transparency in storage and auditing.
This is huge for Indian households. My mother's generation always says gold is 'bahut valuable' but just sits in lockers. If EGRs allow us to lend it out and earn returns, that's smart finance. But will this work in villages where digital literacy is low? Let's see.
Impressive numbers—30,000-35,000 tonnes of idle gold. Imagine if even 10% comes into the system! This could reduce gold imports and save foreign exchange. But I worry about price volatility. Gold prices are already high; will EGRs stabilize or create speculation? 🤔
As a Canadian who follows Indian markets, this is intriguing. Tokenized gold is huge globally, and India's move to regulate it is smart. But will the average investor trust a digital receipt over physical gold? That cultural shift won't happen overnight. Good luck, NSE! 🇮🇳
Great to see Indian markets innovating! But let's not forget that many families still use gold as emergency savings. Making it easy to lend might encourage consumption over savings. Also, will small jewellers benefit or only big players? Inclusion is key.
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