India’s jewellery sector has approached the government with a proposal to establish a regulated Bullion Bank structure aimed at bringing unused domestic gold reserves into the formal financial ecosystem and reducing reliance on fresh gold imports, as per The Moneycontrol report.
The proposal was discussed during a meeting between Piyush Goyal, Union Commerce and Industry Minister of India, and representatives of All India Jewellers and Goldsmith Federation.
According to industry representatives, the proposed framework would create an institutional mechanism to pool, standardise and monetise gold currently held by households, institutions and investment vehicles.
The jewellery body has suggested that the system could channel domestic gold back into the manufacturing and jewellery ecosystem through regulated lending arrangements involving jewellers, exporters, refiners, and manufacturers.
The minister has reportedly agreed to consider a consultation committee involving government authorities, regulators, financial institutions and bullion market participants to examine the proposal further.
AIJGF is expected to hold another round of discussions with the ministry in the coming days.
The proposal comes at a time when India continues facing pressure on the rupee and foreign exchange reserves amid elevated crude oil and gold prices.
Earlier this month, Narendra Modi, Prime Minister of India, urged citizens to postpone gold purchases for a year to help reduce pressure on the country’s import bill.
Industry participants, however, warned that a prolonged slowdown in gold demand could impact nearly 3.5 crore people dependent on India’s jewellery and gold trade ecosystem.
The broader objective behind the proposed Bullion Bank is to monetise what the industry describes as large quantities of “idle gold” lying unused across households and institutions.
AIJGF also recommended integrating gold exchange-traded funds into the proposed structure.
According to the federation, large volumes of physical gold held by Gold ETFs currently remain idle with custodians, while fresh ETF inflows often lead to additional gold imports.
The industry body proposed allowing ETFs to lend 20-30% of their physical gold holdings through the Bullion Bank framework under strict safeguards including insurance, over-collateralisation, audits, daily mark-to-market monitoring and short-tenure lending structures.
To supervise the framework, the federation also suggested forming an inter-ministerial task force involving the Finance Ministry, Commerce Ministry and Ministry of Consumer Affairs.
Read More: Gold Falls to Over 1-Month Low as Oil Prices Surge, Middle East Tensions Rise!
The proposed Bullion Bank framework reflects the jewellery industry’s push for a structured domestic gold monetisation system that could potentially reduce import dependence while supporting the broader gold and jewellery value chain.
Want to read stock market updates in Hindi? Angel One News gives comprehensive share market news in Hindi.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 19, 2026, 11:51 AM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
