MUMBAI (Reuters) - A bullion association in India has tied up with BSE Ltd, the country's oldest stock exchange, to launch the nation's first physical gold trading exchange.
The Mumbai-based India Bullion and Jewellers Association (IBJA), a group consisting of gold dealers, traders and jewellers, will hold 70 percent of the planned gold exchange, while BSE will own the remainder, said Saurabh Gadgil, a vice president at the trade body.
A dedicated physical exchange could lead to standard gold pricing in India, the world's second-biggest consumer of the precious metal after China. It could also bring transparency to a market which can involve large cash transactions.
A physical exchange is likely to mean jewellers, retailers, refiners and banks can trade over a regulated platform.
Gadgil said he expected the exchange to be operational in six months, provided the government passes a proposed goods and services tax bill to reform the country's tax system. The partners in the exchange will next week seek approval from the Indian capital markets regulator.
India's push for a gold exchange follows the government's gold monetisation and sovereign gold bond schemes launched last month, aimed at mobilising the country's reserves, and reduce imports which are worsening the trade deficit.
Currently, Multi Commodity Exchange (MCX)
(Reporting by Rajendra Jadhav; editing by Keith Weir)
