MCX widens domestic refiner pool, revises delivery norms

Kolkata: The Multi Commodity Exchange (MCX) has aligned its Good Delivery norms with Bureau of Indian Standards (BIS)-certified bullion and expanded its list of accredited refiners, allowing more locally refined metal to be delivered on the exchange. The decision could boost supplies from domestic refiners and recyclers while reducing reliance on imports of gold and silver.

The move is likely to have the biggest impact on silver after the Centre, on May 16, imposed curbs on silver imports-three days after hiking customs duties on precious metals from 6% to 15%. James Jose, president, Precious Metals Refineries Forum, said silver recovered as a by-product during the refining of impure gold or dore gold can now more easily enter the organised market through MCX-approved refiners, helping improve domestic availability at a time of tighter import supplies. India imports 7,000-8,000 tonnes of silver annually to meet domestic demand.

MCX has expanded its Good Delivery framework by permitting the delivery of India Good Delivery one-kilogram gold bars and empanelling seven domestic refiners that meet its revised Good Delivery norms. A copy of the MCX circular, seen by ET, shows that the exchange had earlier approved three refiners - M.D. Overseas, Kundan Refinery and Zaveri & Company. It has now added four more: Titan Company, Augmont Enterprises, Parker Precious Metals LLP and Sovereign Metals.


Although the circular seems to be a technical amendment to contract specifications, industry executives said it marks the beginning of a market-driven monetisation ecosystem for household gold.

India Bullion & Jewellers Association (IBJA) national secretary Surendra Mehta said, "Under the revised framework, MCX-approved refiners can procure old jewellery and recycled gold directly from the open market, refine it into India Good Delivery-standard bars and deliver the bullion against MCX gold futures contracts. Unlike the Gold Monetisation Scheme, which relied on banks to mobilise idle gold and witnessed limited success, the new mechanism allows refiners to commercially source, recycle and monetise household gold without involving banks."

India is estimated to hold over 30,000 tonnes of gold in households, much of it lying idle. "By creating a transparent, exchange-linked outlet for recycled gold, the MCX framework could gradually increase domestic bullion availability, deepen the organised recycling industry and reduce the country's reliance on imported gold," the IBJA executive added.