Jewellers' body urge govt to set up bullion bank to pool idle gold holdings
This story was originally published at 21:50 IST on 19 May 2026
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NEW DELHI – All India Jewellers and Goldsmith Federation has urged the government to create a bullion bank framework to mobilise idle domestic gold stocks and thereby reduce dependence on imports. The bullion bank offers a long-term solution to address concerns of gold imports depleting foreign exchange reserves, rather than suppressing domestic demand, the federation said.
Prime Minister Narendra Modi recently appealed to the public to avoid non-essential gold purchases, which has created "broad sentiment against gold purchases," potentially impacting the livelihoods of 350 million people who are directly or indirectly dependent on the jewellery ecosystem, the federation said.
It urged the government to take steps to mobilise idle gold stocks and circulate them to jewellers, so that fresh imports can be reduced. The federation also highlighted the need to revamp the existing gold monetisation scheme, as it has not "achieved the desired scale despite India possessing one of the world's largest privately held gold reserves."
The gold monetisation scheme needs a stronger institutional framework, as it has only pooled a limited amount of gold, the federation said. In addition, the government has discontinued medium-term and long-term deposits under the scheme, leaving only short-term tenures.
It also suggested integrating gold exchange-traded funds and institutional holdings into the bullion bank's gambit, and creating efficient gold-loan structures. The federation urged the government to constitute a working group, comprising industry representatives and policymakers, to draft a regulatory framework linked to the India International Bullion Exchange or the Gujarat International Finance Tec-City International Financial Services Centre. End
Reported by Afra Abubacker
Edited by Saji George Titus
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