Import of Gold and Silver by Indian Bank through IIBX
OVERVIEW:
In a recent move for the import process of gold and silver into India, the International Financial Service Centres Authority (IFSCA) issued a circular on April 19, 2024.
The circular extends permission to Indian banks, authorized by the Reserve Bank of India (RBI), to act as Special Category Clients (SSC) of the India International Bullion Exchange IFSC Ltd (IIBX).
This move is in line with the Reserve Bank of India’s (RBI) earlier approval for authorized Indian banks to enter into such transactions.
HIGHLIGHTS OF THE CIRCULAR:
The circular permits Indian banks authorized by the RBI to import gold/silver to act as Special Category Clients (SCC Banks) of the IIBX.
This allows them direct access to the trading system of the IIBX without the need for a Bullion Trading Member, for undertaking such import on behalf of their clients.
However, SCC Banks must utilize the services of an IFSC Banking Unit registered as a Bullion Clearing Member for clearing their purchase transactions.
SSC Banks are restricted to placing buy orders on the IIBX for the import of gold/silver on behalf of their clients and cannot enter sell orders.
Orders on the IIBX are placed in the name of SSC Bank, and they must ensure compliance with regulatory norms, including filing the Bill of Entity within eleven calendar days from the date of remittance.
SSC Banks are not considered Bullion Trading Members or intermediaries of the IIBX and must adhere to IFSC (Bullion Exchange) Regulations, 2020, operating guidelines, and the Code of Conduct issued by IIBX.
They are also required to ensure adherence to the terms and conditions / instructions, as applicable to them, stipulated by the RBI, Directorate General of Foreign Trade (DGFT) and any other regulatory / government body.
They shall also comply with the Code of Conduct that may be issued by IIBX.
AIM OF THE CIRCULAR:
This circular, issued under the authority of the International Financial Services Centres Authority Act, 2019, aim to streamline the import process for gold and silver through the IFSC, promoting transparency and efficiency in bullion trading activities.
CONCLUSION:
The RBI’s authorization for Indian banks to import gold and silver directly through IIBX in the IFSC marks a significant development in bullion trading regulations.
This move not only simplifies the import process but also enhances market accessibility for authorized banks and promotes the IFSC as a robust international financial service hub.
Market participants should ensure compliance with regulatory requirements and leverage this opportunity to optimize their bullion trading activities in the IFSC.
