Mumbai: The World Gold Council (WGC) has suggested the government to allow Indian banks to trade and facilitate trading in physical bullion and its derivatives to bring transparency in the bullion trade.

In a report ‘The need for Bullion Bank in India’ submitted to the government, the Council has suggested that banks with proper checks and balances should be given flexibility for launching innovative gold-backed products to attract consumers investments.

The Council believes launch of bullion bank will bring in much needed transparency in bullion trade, boost exports and ease credit flow to the sector.

Mr. Somasundaram PR, Managing Director of the WGC (India) says, “Bullion banks are and continue to be a key pillar of the market – they build greater trust across the gold value chain, drive efficiency, provide liquidity, promote transparency and support price discovery. India’s gold market is one of the largest in the world, but it lacks organisation, structure and trust. But that is beginning to change with numerous transformational initiatives underway. A robust bullion banking industry could support and accelerate that shift – inspiring trust, bolstering innovation and driving growth.

The timing for bullion banking reforms in India could not be more propitious. The Indian gold spot exchange is expected to launch in the near future, a key moment in the development and formalisation of the domestic gold market. Commercial banks need to be part of that journey, offering a range of bullion banking products and services to customers along the gold value chain and promoting higher value addition.

This report outlines the role that bullion banks play in leading gold centres around the world. It explains how India could develop a thriving bullion banking industry over the coming years to support its overarching economic ambitions, and enable gold to play a role in this journey. The report is based on deep discussions and research with banks, exchanges, refiners, vaulting services and regulators around the world, as well as key stakeholders in India. Indian commercial banks are ready to embrace bullion as an asset class. India can reap significant benefits, both within its gold market and across the wider economy with a robust bullion banking industry. The stage is set!”