India International Bullion Exchange (IIBX)

Context

The State Bank of India (SBI) has declared its status as the first bank to achieve the designation of a trading-cum-clearing (TCM) Member of the India International Bullion Exchange located at the GIFT City in Gujarat.

About India International Bullion Exchange (IIBX)

• India’s First International Bullion Spot Exchange: India International Bullion Exchange (IIBX), established in GIFT-IFSC, is India’s first international bullion spot exchange. It enables authorized jewelers to import bullion and conduct transactions on the exchange.

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Significance of India International Bullion Exchange (IIBX)

• Bullion Import Gateway: India International Bullion Exchange (IIBX) serves as the primary channel for bullion imports into India, directing all imports for domestic consumption through the exchange.
• Enhanced Facilitation: It will enable transparent price discovery, ensure responsible sourcing and supply chain integrity, and uphold quality assurance and standardization.
• Competitive Offerings: IIBX offers a diverse range of products and technology at highly competitive costs compared to Indian exchanges and global counterparts in Hong Kong, Singapore, Dubai, London, and New York.
• Gold Trading Offerings: IIBX facilitates the trading of one kilogram of gold at 995 purity, as well as gold mini in 100-gram increments at 999 purity.
• Standardized Trading: All contracts will be listed, traded, and settled in US dollars.
• Gold Import Process: Upon importation by authorized entities, the gold will be deposited in one of the vaults, which will issue bullion depository receipts. These receipts will subsequently be traded in dollars on the exchange.
• Regulation of India International Bullion Exchange (IIBX): The IIBX is regulated by the International Financial Services Centers Authority (IFSCA), a unified authority for the development and regulation of financial products, financial services, and financial institutions at IFSCs.

Membership Categories of India International Bullion Exchange (IIBX)

Prior to Introduction of India International Bullion Exchange (IIBX)

• Consignment Model: Presently, gold is imported into various cities in India through a consignment model by banks and agencies nominated and approved by the RBI, and subsequently distributed to traders/jewellers.
• Gold Transaction Fees and Premiums: Banks and other agencies receive fees from gold exporters for services such as handling and storage, and they also charge a premium on gold when conducting transactions with domestic buyers.

• • The buyer transfers this fee along the value chain until it reaches the ultimate customer.

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New RBI Guidelines for Importing Gold

• Extended Advance Payments: Banks are now permitted to enable qualified jewellers to make advance payments for gold imports through IIBX for an 11-day period, in accordance with the prevailing Foreign Trade Policy and regulations under the IFSC Act.
• Gold Import Payments through IIBX: As per RBI regulations, qualified jewellers must process all payments for gold imports through IIBX using the approved exchange mechanism authorized by IFSCA.

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