Bullion spot exchange to come up in India

March 16, 2009

Commodity Online
AHMEDABAD: In the time of recession, everybody wants to ride the bullion wave. So, companies are vying to jump onto the bullion bandwagon right from the diamond traders in Surat to equity stock brokers in Mumbai.

In a recent development, Riddhi Siddhi Bullion (RSBL), a leading bullion trading firms in India, has inked a pact with the National Commodity and Derivatives Exchange (NCDEX) to launch a spot exchange for precious metals.

According to a press note, the exchange — NCDEX Bullion —  will be launched in April.

For the purpose, all the necessary spadework has been done and the firm doesn’t need any permission from Forward Markets Commission as it is a spot exchange. The joint venture is awaiting the Reserve Bank of India’s (RBI’s) approval now.

The proposed spot exchange will have contracts in dollar denomination, for the first time in India. However, the settlement will be done in rupee terms.

The company also plans to bring in bankers to the spot exchange. NCDEX is not so strong in the precious metals category. RSBL already has a strong physical infrastructure and network due to its electronic over-the-counter (OTC) platform for trading in bullion items.

RSBL has delivered 15 tonnes of gold in the last one year through its online OTC platform. RSBL spot OTC platform was launched in March 2008.

The bullion trading company has a total of eight delivery centres across the country, which include two recently rolled out centres in Surat and Rajkot. In addition to this, RSBL plans open six more centres in cities such as Kochi, Delhi, Kolkata, Vadodara and Bhavnagar.

Now, delivery of silver is available only at thee centres — Mumbai, Ahmedabad and Chennai. Eventually, the company will start silver deliveries in all its centres.

In order to further strengthen its association with NCDEX, RSBL has come up with a scheme wherein customers registered with it before April 9, 2009 will be given free membership of NCDEX.

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