The Ministry of Commerce and Industry is officially reviewing a landmark proposal to establish a regulated “Bullion Bank” aimed at transforming India’s massive domestic gold reserves into an active economic asset.

The proposal was presented directly to Union Commerce and Industry Minister Piyush Goyal by a delegation from the All India Jewellers and Goldsmith Federation (AIJGF). In response, Minister Goyal has agreed to form a comprehensive consultation committee—comprising government representatives, jewellery industry stakeholders, bullion market experts, financial institutions, and market regulators—to thoroughly examine the framework.

Key Highlights of the Proposal:

• Activating Idle Wealth: Establishes a centralised financial framework to pool, standardise, settle, and lease domestic gold, significantly reducing India’s heavy reliance on expensive foreign imports.
• Tapping a $4 Trillion Market: Aims to mobilse the estimated 25,000 to 27,000 tonnes of gold held by Indian households, temples, and private institutions—a stockpile currently valued between $3.65 trillion and $4.3 trillion.
• Earning Interest on Gold: Transforms physical gold from a passive, non-yielding asset into an active, interest-earning investment, eliminating traditional locker storage fees for citizens.
• ETF Integration: Proposes allowing Gold Exchange-Traded Funds (ETFs) to lend 20–30% of their idle physical holdings back into the jewellery ecosystem under strict over-collateralised, insured, and daily marked-to-market safety protocols.

A Strategic Move for Economic Resilience

Currently, the vast majority of India’s gold wealth remains locked away and unproductive. By acting as a trusted intermediary, the proposed Bullion Bank will allow households and institutions to securely lend their gold back into the domestic jewellery ecosystem.

“This framework has the potential to permanently change how India manages its gold,” stated the AIJGF in their proposal. “By unlocking domestic reserves, we can stabilise the market, support local artisans, and strengthen the national economy.”

To ensure seamless execution and regulatory oversight, the AIJGF has also requested the creation of a dedicated inter-ministerial task force. This body would bring together the Ministry of Finance, the Ministry of Commerce, and the Ministry of Consumer Affairs to oversee the initiative’s roll-out.