1. The Changing Face of Gold Imports into India
IIGC 2018
Rajesh Khosla

2. IIGC 2018 Rajesh Khosla Changing face of Duty-Paid Gold Import
Apr-Jun 2018 Import
IIGC 2018
Rajesh Khosla

3. Domestic Banks
Consignment business will shrink, compelling Banks to re-visit their current business model.
Banks will become the swing element in servicing demand (refiners ability is limited to the extent of mine Dore they are able to source).
Banks will selectively import gold to service domestic gold loans and loans to exporters; the business of gold loans will also become more challenging.
Banks will need to provide bullion banking services to refiners and major clients.
GMS should command greater attention. Banks will need to operate metal accounts; set up inter-bank clearing in metal to deploy GMS gold efficiently.
The future for Banks is Bullion Banking.
IIGC 2018
Rajesh Khosla

4. Bullion Banking; a snap-shot
The ability to offer a diverse range of Precious Metals products and Services including:
Unallocated and Allocated Precious Metal Accounts .
Sale and Purchase of Physical Precious Metals.
Spot, Forwards, Swaps, Options Trading and Hedging.
Financing through Gold Loans and Consignments.
Gold jewelry financing.
Regular Market Reports and Analysis
IIGC 2018
Rajesh Khosla

5. Nominated Agencies
Like Banks, will see shrinking business volume for consignment sales.
Will focus on servicing exporters for gold loan.
Will push for approval for domestic gold loan.
Will need to innovate mine Dore procurement and its financing.
Will need to get proactively involved in GMS, including creating support infrastructure.
IIGC 2018
Rajesh Khosla

6. Overseas suppliers Progressively losing interest with India ??
Will need to revisit their business model.
Will tie up with select Indian Banks to provide full range of bullion banking services.
Will focus on mine Dore supply instead of refined bullion supply
IIGC 2018
Rajesh Khosla

7. Refiners Presently unable to do gold loans; but in the long run….??
Are becoming market price setters and expanding their direct distribution reach.
Will face increasing pressure to comply with Responsible Gold and Good Delivery standards; the debate will intensify.
Will push for bullion banking facilities including loco London metal accounts.
Will push for ability to export deliverable bullion bars at times of market disparity.
Greater interaction with Regulatory authorities including RBI.
IIGC 2018
Rajesh Khosla

8. Others Participants in Bullion
Commodity Exchanges:
---will actively engage in India Good Delivery.
---Spot Gold Exchange will be fast-tracked.
Bullion Merchants:
---Like Banks, will need to re-invent and innovate.
Jewellers:
---will encourage refiners to become compliant.
IIGC 2018
Rajesh Khosla

9. The unknown elements
Progressive reduction of customs duty reaches a stage where smuggling becomes unattractive, resulting in need to re-balance the supply-demand equation.
Domestic mine development could contribute to meet (up to 100 tons p.a.??) demand.
An innovate GMS may succeed in mobilizing considerable quantity of gold to service the domestic market.
Will Banks welcome a start – stop business?
IIGC 2018
Rajesh Khosla