India International Bullion Exchange (IIBX)

India International Bullion Exchange (IIBX)

News: PM Modi launched India’s 1st IIBX at International Financial Services Centres (IFSC) at GIFT City (Gujarat)

What is a Bullion?
• Bullion refers to physical gold and silver of high purity that is often kept in the form of bars, ingots, or coins.
• Bullion can sometimes be considered legal tender and is often held as reserves by central banks or held by institutional investors.
• The Government had notified in August 2020 about the Bullion Spot Delivery Contract and Bullion Depository Receipt (BDR) with underlying Bullion as Financial Product and related services as Financial Services.

What is a Bullion exchange?
• A bullion Exchange is a market through which buyers and sellers trade gold and silver as well as associated derivatives.
• There are various bullion markets around the world with the London Bullion Market known as the primary global market trading platform for gold and silver.

About IIBX:
• India International Bullion Exchange (IIBX) was first announced in the Union Budget 2020 for easing the Gold Import by Jewelers in India.
• It is a platform that not only enrolls jewelers to trade on the exchange, but has also set up necessary infrastructure to store physical gold and silver.
• IIBX will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialisation of gold in India.
• IFSCA is entrusted with notifying the eligible qualified jewelers in India for directly importing gold through IIBX.
• India is the world’s 2 nd biggest consumer of Gold after China.

About GIFT City:
• GIFT (Gujarat International Finance Tec-City) City is located in Gandhinagar, Gujarat.
• It consists of a multi-service Special Economic Zone (SEZ), which houses India’s first International Financial Services Centre (IFSC) and an exclusive Domestic Tariff Area (DTA).
• GIFT city (Gujarat International Finance Tec-City) is envisaged as an integrated hub for financial and technology services not just for India but for the world.
• IFSCA is the unified regulator for the development and regulation of financial products, financial services and financial institutions in International Financial Services Centers (IFSCs) in India.
• The social infrastructure in the city includes a school, medical facilities, a proposed hospital, GIFT City business club with indoor and outdoor sports facilities. It also includes integrated well-planned residential housing projects making GIFT City a truly ‘Walk to Work’ City.

Trivia for Prelims - Recently, Zimbabwe’s central bank has introduced gold coins (‘Mosi-oa-Tunya’) that it hopes will ease citizens’ demands for foreign currency.