World Gold Council has set up a full-fledged local unit with a corporate structure in India. This gold promoting agency was till now operating here only as a liaison office.
A separate private company has been set up with effect from April 1.
A corporate structure will help WGC take up activities on a larger scale in the Indian market including entering into commercial arrangements with banks and gold industry players in the coming years, it is learnt.
Legally, the setting up of a corporate structure will help remove the disadvantages of operating as a liaison office.
As a liaison office, WGC could only promote the existence of parent entity and not any individual products of any Indian entity.
Currently, Reserve Bank of India norms forbid a liaison office set up in India from entering into any commercial activity in the country.
The liaison office will have to maintain itself from remittances received from abroad through the normal banking channel.
WGC had in 2011 signed a memorandum of understanding with India Post for promotion of gold medallion across India through the postal network.
Although the MoU could not be legally interpreted as an association, joint venture or partnership between WGC and India Post, some legal experts saw it as one with a commercial nature given that WGC logo and goldmark were allowed to be used by India Post.
Also, WGC had then agreed to involve itself in the advertising and promotion activities of sale of gold medallions through India Post.
This MoU, entered at a time when WGC had only a liaison office here, is unlikely to be impacted by the recent move to set up a local unit under a corporate structure here, sources said.