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International Financial Services Centre Authority Inks Mou With India Gold Policy Centre Of IIM Ahmedabad

IFSC Authority was established on the 27th April 2020 by the Government of India as the unified regulator and has been endowed with the responsibility of starting this exchange.

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International Financial Services Centre Authority (IFSCA) and India Gold Policy Centre (IGPC) - IIMA signed a Memorandum of Understanding (MoU) at the IFSCA, GIFT City Gandhinagar, Gujarat on 12th September for providing consulting to facilitate the establishment of International Bullion Exchange in India.

At the Union Budget 2020 the Finance Minister Smt. Nirmala Sitharaman announced that India shall soon have an International Bullion Exchange (IBE) at the International Finance Centre (IFSC) in GIFT City, Gandhinagar, Gujarat. IFSC Authority was established on the 27th April 2020 by the Government of India as the unified regulator and has been endowed with the responsibility of starting this exchange.

IGPC-IIMA, an independent think tank with in-house expertise in the area of gold markets shall be a knowledge partner to IFSCA to roll out the International Bullion Exchange successfully. IGPC-IIMA is expected to take a top-down approach by setting the broader vision, developing success strategies, and creating the operating guidelines for the seamless functioning of the IBE.

Shri. Injeti Srinivas, Chairperson of IFSCA said, “GIFT IFSC is an emerging global financial services hub that is being built on India’s strength in technology and intellectual prowess in the area of financial markets; it is intended to leverage the advantages of both the size and potential of the Indian economy and that of Indian diaspora. International Bullion Exchange at IFSC is an initiative on lines that fits into the vision of the Hon’ble Prime Minister to make IFSC a global hub for financial services activities. IBE is intended to strike an equilibrium in order to reduce the market inefficiencies that currently exist in the Indian bullion trade. Thus this move would go on to integrate precious metals trade with financial markets, and create a transparent platform for bullion trading. Through this IBE aims to achieve efficient price discovery, quality and services that are on par with international standards.”

About the MoU with IGPC-IIMA, Mr Srinivas said, “We are glad to have such sectoral expertise within institutions like IIMA when we are looking at a project with a vision that has global reach. We are excited about this initiative and looking forward to a fruitful engagement”

Prof Arvind Sahay, Chairperson, IGPC-IIMA said “India’s share of global gold consumption is about 20 to 25%. However, even after two decades of gold market opening up, we still do not have an infrastructure that connects India to the rest of the world. It is a one-way market for bullion, yet we complain about dollar outflow. The value-added service that banks could offer through precious metals products still remains muted due to regulatory hurdles. Price discovery and transparency is fundamental to a well-functioning market that can operate at scale. Creating a market that is connected to the rest of the world is an answer to most of the challenges that gold is said to bring to economy. IBE is expected facilitate market development through higher degree of compliance, traceability, and product innovation.” [email protected] is happy to participate in this endeavour.  

About the MoU, “IIMA has extended support to various strategic nation building initiatives in the past and this collaboration reasserts our commitment.”