Do you love gold and hope to build a jewellery collection?

The National Spot Exchange Ltd (NSEL) may help you in this venture.

Hold a demat account on the NSEL, acquire small quantities of e-gold, consolidate and go to a jeweller to exchange the paper metal for jewellery.

NSEL has brought in Brink's Arya India Private Ltd, an arm of Brink's Global Services, as its vault manager to safe-keep the yellow metal and transfer gold from retail investor to jewellers.

“We have just tied up with Gitanjali Gems for this. NSEL investors can select jewellery that is equivalent (in grammage) to their demat gold and give the cashier their DP (depository participant) Slip. “The jeweller can redeem gold from Brink's Arya or let it accumulate,” Mr Anjani Sinha, Managing Director and Chief Executive Officer of NSEL, told Business Line .

How it works

After verifying the signature, the DP would transfer the e-gold quantity to the jeweller, who can redeem it from the vault.

On their part, jewellers have to ensure delivery of Hallmark certified gold. They also have to sign a code of conduct agreement with NSEL in this regard.

Though it is much like transfer of shares in the stock market with DP as an intermediary, NSEL had roped in Brink's Arya to manage the vault. For now, the exchange is paying a fee for the safe-keeping of the commodity.

Starting with the initial tie-up with Gitanjali, NSEL hopes to sign up other jewellers as well. “We are in talks with other jewellers. We have issued a circular and it will take sometime before others join the league,” Mr Sinha said.

Boon for jewellers

While it is convenient for investors to swap gold with jewellery, for jewellers this tie-up could help get an additional set of customers, besides getting making charges and increasing footfalls into their showrooms.

Stating that the interest of retail investors in gold was increasing, he said investors could go for a Systematic Investment Plan by buying a certain quantity of gold periodically.

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