NSE said in its press release that the move is a transformative initiative designed to bring transparency, efficiency, and formalisation to India’s massive, deeply tradition-rooted gold market.
The launch is expected to bridge the age-old gap between physical gold and the financial markets by offering a regulated, secure, and technologically advanced platform for trading the precious commodity.
EGRs are dematerialised securities that represent ownership of physical gold, which is securely stored in Securities and Exchange Board of India (Sebi) accredited vaults and held electronically through depositories. Each EGR is fully backed by physical gold and is tradable on the exchange.
NSE’s EGR launch is expected to benefit stakeholders across the board including jewellers, refiners, traders, and institutional investors.
NSE also witnessed the successful dematerialization of a 1000-gram gold bar into an Electronic Gold Receipt, symbolising the seamless conversion of physical gold into a secure, tradable electronic instrument within the regulated ecosystem. This milestone underscores the operational readiness of the NSE EGR framework and its ability to facilitate efficient, transparent, and delivery-backed trading in gold.
Commenting on the development, NSE’s Chief Business Development Officer (CBDO) Sriram Krishnan said the introduction of EGRs at NSE marks a pivotal evolution in how India interacts with its most cherished asset. “By leveraging NSE’s robust technology and liquidity framework, we are democratizing access to gold, enabling investors across the nation to trade with unprecedented transparency and confidence. We believe that by creating a seamless, secure, and digital pathway for gold investment, we are positioning gold as a modern, integrated asset class within our capital markets, ultimately reducing dependence on fragmented benchmarks and fostering deeper financial inclusion,” the NSE release said.By facilitating electronic holding, assured quality, and seamless convertibility between physical and digital formats, EGRs empower investors to participate in the gold market even in smaller denominations, providing improved liquidity and flexibility comparable to other financial instruments held in demat form, Krishnan added.
Meanwhile, Sebi Chairman Tuhin Kanta Pandey had in December expressed regulator’s wish to review the existing framework for EGRs while acknowledging that the EGR framework has not gained the desired traction so far.
“EGRs were meant to create a regulated market for trading gold and establish India as a global price-setter for gold. While the EGR framework may need a review, I urge the industry to educate its participants and investors to deal only in regulated gold products,” Pandey said while speaking at an event organised by Commodity & Capital Participants Association of India (CPAI).
Pandey said the regulator is analysing structural, operational, and regulatory challenges that have limited the adoption of EGRs, moneycontrol reported.
Also read: Gold EGR framework may need a review to revive India’s price-setter ambition: Sebi Chairman
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