- India's jewellery body urges Centre to set up regulated Bullion Bank framework to cut gold imports
- AIJGF recommends mobilising idle domestic gold from households, temples, and ETFs into formal system
- Bullion banking would enable jewellers and exporters to access local gold via lending channels
India's leading jewellery trade body has urged the Centre to consider setting up a regulated “Bullion Bank” framework to reduce the country's dependence on imported gold and ease pressure on foreign exchange outflows.
In a representation to Union Commerce Minister Piyush Goyal, the All India Jewellers & Goldsmith Federation (AIJGF) said India should focus on mobilising idle domestic gold reserves instead of taking measures aimed at curbing demand for the precious metal.
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The industry body proposed that unused gold lying with households, temples and Gold Exchange Traded Funds (ETFs) be brought into the formal financial system through a regulated bullion banking ecosystem.
According to the federation, such a framework would allow jewellers, refiners and exporters to access domestically available gold through lending channels, thereby reducing the need for fresh imports.
“India possesses enormous untapped gold reserves in households, religious institutions and investment products. A regulated Bullion Bank ecosystem can help channel these resources productively and significantly lower the gold import burden,” the body said in its statement.
The AIJGF also sought permission for Gold ETFs to lend a portion of their physical gold holdings under a regulated structure to improve liquidity within the domestic bullion ecosystem.
The trade body argued that a bullion banking model could help reduce forex outflows linked to large-scale gold imports while creating a more efficient gold supply chain for the jewellery sector.
It further urged the government to constitute a joint consultation panel comprising industry representatives and policymakers to draft a regulatory framework for bullion banking operations in India.
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