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Only card networks and issuing banks may get to tokenise data, BFSI News, ET BFSI

Banking & Finance

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Only card-issuing banks and card scheme operators, such as the National Payments Corporation of India, Visa and Mastercard, would be allowed to tokenise customer card data, Reserve Bank of India (RBI) is said to have indicated to the industry in a meeting Monday.

The central bank has clarified to the industry that none of the intermediaries, even licensed payment gateways and acquiring banks, would be allowed to store card data and offer tokenised files to merchants under the upcoming payment aggregator and payment gateway regulatory regime kicking in from 2022, two sources aware of the matter told ET.

Under the new norms, every online merchant processing transactions for customers will only have access to a ‘tokenised’ key linked with the consumer’s cards instead of the entire card file. The meeting saw participation of members from industry pockets such as payments, banking and web-commerce, the sources added.

“The central bank has reiterated its stance that it only sees tokenisation as an alternative solution for merchants aiming to offer a one-click checkout facility to customers,” said a source present at the meeting.

“It has also been made clear that only card networks and issuing banks will be allowed to tokenise files corresponding to customer card details. Payment aggregators and merchants will have to devise systems to avail this tokenised link from their respective banks or networks,” the person added.

Tokenisation is an encryption technology that enables card operators to mask actual details of a debit or credit card by substituting with a secure, unique digital token linked to a customer device.

Only this proxy token can be stored by merchants and aggregators to process payments to offer one-click checkouts. Those merchants without access to tokenised links will have to ask customers to fill in the entire details of their card including the 16-digit number every time they make a payment.

The central bank’s insistence on strict card storage norms is on the back of several recent high-profile cyber attacks such as those on JusPay, Mobikwik, Big Basket, Air India and Upstox.

RBI is said to be firm on its stand on customer security where it doesn’t want entities that are not under its direct supervision to be storing card details of customers on servers.

While payment aggregators will be allowed to store card details for processing of redressals and chargebacks, the new rules will stipulate a fixed time under which this data will have to be deleted.

ET reported last week that industry forums, including the Payments Council of India (PCI), have suggested alternative solutions beyond encryption through tokenisation – such as secure reference on files – to minimise customer inconvenience to the central bank.

RBI didn’t respond to ET’s mailed queries.



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Government gives hefty pension boost to bank employees, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: The government has announced changes to the pension scheme of public sector banks. For family members of employees, the ceiling on family pension has been lifted and, for current employees, the banks’ contribution to the scheme has been increased by 4 percentage points to 14% from earlier 10%.

“Earlier, the scheme had slabs of 15%, 20% and 30% of the pay that a pensioner drew at that point of time. It was capped subject to a maximum of Rs 9,284. That was a very paltry sum and finance minister Nirmala Sitharaman was concerned and wanted that to be revised so that family members of bank employees get a decent amount to survive and sustain,” said Debashish Panda, secretary in the department of financial services, at a press conference held by Sitharaman.

The second change is that the employer contribution to the New Pension Scheme (NPS) corpus has been enhanced to 14% of the pay from 10% earlier.

The changes are in continuation of the 11th bipartite settlement signed by banks with unions on wage revision last year. In addition to the wage revision, there was a proposal for enhancement in family pension and also the employer’s contribution under the NPS.

A statement issued by the government said that thousands of families of public sector banks will be benefited by the enhanced family pension scheme, while increase in employer contribution will provide increased financial security to the bank employees under the NPS.

Those employees who have been with banks before 2004 are eligible to a defined benefit pension scheme where the monthly payout is determined by a formula based on their last drawn wage. These employees will benefit from the increase in pension limits.

Employees who have joined after 2004 are part of the NPS where the employees and the banks contribute toward a retirement corpus. After retirement, the corpus must be used to buy an annuity from an insurance company that will provide monthly income. The extent of monthly income depends upon the size of the corpus and cost of annuity.

With the fall in interest rate, the returns through annuity schemes have been shrinking, resulting in a call for higher contribution. The insurance regulator is also working with the industry to develop an inflation-linked annuity scheme.



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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 4,40,062.39 3.14 0.01-5.30
     I. Call Money 7,091.91 3.19 1.95-3.40
     II. Triparty Repo 3,43,574.30 3.13 2.92-3.15
     III. Market Repo 89,391.18 3.15 0.01-3.29
     IV. Repo in Corporate Bond 5.00 5.30 5.30-5.30
B. Term Segment      
     I. Notice Money** 719.45 3.28 2.00-3.50
     II. Term Money@@ 416.75 – 3.28-3.80
     III. Triparty Repo 0.00 – –
     IV. Market Repo 496.15 3.40 3.40-3.40
     V. Repo in Corporate Bond 30.00 5.35 5.35-5.35
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Wed, 25/08/2021 1 Thu, 26/08/2021 5,72,484.00 3.35
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Wed, 25/08/2021 1 Thu, 26/08/2021 0.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -5,72,484.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo          
    (iii) Special Reverse Repo~ Fri, 13/08/2021 14 Fri, 27/08/2021 4,481.00 3.75
    (iv) Special Reverse Repoψ Fri, 13/08/2021 14 Fri, 27/08/2021 352.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 13/08/2021 14 Fri, 27/08/2021 2,50,029.00 3.43
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF          
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
  Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
  Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
  Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       23,295.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -1,47,274.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,19,758.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 25/08/2021 6,06,510.35  
     (ii) Average daily cash reserve requirement for the fortnight ending 27/08/2021 6,27,870.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 25/08/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 30/07/2021 10,95,060.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/744

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Reserve Bank of India – Tenders

Tenders

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E-Tenders are invited from eligible contractors / firms for the captioned work estimated to cost ₹17.44 lakh through the MSTC portal. The close bid date is 10.09.2021 at 1400 hrs.

NIT Number and Timeline is given below:

S. No. Activity Tentative date
1. Date of Press-Web Advertisements 26.08.2021
2. e-Tender no. RBI/Patna/Estate/82/21-22/ET/111
3. Mode of Tender e- Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through www.Mstcecommerce.com/eprochome/rbi)
4. Date of NIT (along with complete tender document) available to parties to download 12:00 Noon of 26.08.2021
5. Date of Pre-bid meeting at Estate Department, RBI Main Building, Patna (offline) 13:00 PM of 02.09.2021
6. Earnest Money Deposit ₹ 34,888/-
7. Start Bid date- Date of Starting of e-Tender for submission of online Techno-Commercial Bid and Price Bid at www.mstcecommerce.com/eprochome/rbi- 12:00 Noon of 26.08.2021
8. Close Bid date- Date of closing of online e–tender for submission of Techno-Commercial Bid & Price Bid 1400 hrs of 10.09.2021
9. Date & time of opening of Part–I (i.e. Techno-Commercial Bid) :
Part–II (Price Bid) : Part–II (Price bid) shall be opened at a later date that will be intimated to vendors earlier.		 15:30 hrs of 10.09.2021
10. Transaction Fee Payment of transaction fee through MSTC payment gateway/NEFT/RTGS in favour of MSTC LIMITED

Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website / MSTC Website and will not be published in the newspaper.

Sanjiv Dayal
Regional Director
(Bihar)

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Chief Economic Advisor K V Subramanian, BFSI News, ET BFSI

Banking & Finance

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Exhorting the Indian BFSI sector to make a mark globally, Chief Economic Advisor K V Subramanian has said India should have at least six banks in the global top 100.

“It is a matter of mindset now, the mindset has to be one where we are not happy with just being lions at home and lambs abroad, we have to be lions globally as well, Krishnamurthy Subramanian said, delivering the keynote address at ETBFSI Summit.

Stating that India has to become a big player in the BFSI space in the next decade, he said the sector must seek inspiration from IT, pharma & sports.

BFSI sector needs to have that hunger which will also help the Indian economy, Subramanian said, adding, “Five Chinese banks are in the top 100 global, Swedish banks, American banks. There is no reason why our banks cannot be in the top 20 either.”

Ruing that India has only one bank in the global top 100 — SBI at 55th position, he said for the size of the economy, India should have at least six banks in the global top 100, some in the top 10 or the top 20.

Drawing an analogy with cricket, he said the Indian BFSI sector appears like the Indian cricket team of the 1990s which could boast a lot of victories at home but had nothing noteworthy outside the shores, globally.

The sector has to aspire to become like a cricket team under Sourav Ganguly, Mahindra Singh Dhoni or Virat Kohli where they’re achieving global recognition.

“The BFSI sector has to start mattering globally, their aspirations need to be scaled up. Aspiration has to be set, given the aspiration that India has set for the economy itself.”

Fixing problems

The CEA said India’s BFSI sector has a quality and quantity problem which needs to be fixed, especially when the Prime Minister has outlined Rs 100 lakh crore infrastructure building apart from the National Infrastructure Pipeline.

“Infrastructure will actually require the BFSI sector to be able to participate and thereby learn how to do high-quality lending without suffering the problem of non-performing assets, crony lending, evergreening of loans, gold plating of loans, all the kind of problems that we have witnessed in the Indian financial sector over the last decade,” he said.

He said the country has large corporates and large borrowers who end up borrowing but not repaying, and yet many times banks actually end up giving credit to the defaulters as well.

Observing that on the credit side India is far behind, he said, “The ratio of credit to private credit to GDP at about 58% is one-third of the global average of, close to 170 per cent.”

He said the BFSI sector should avoid the phenomenon of accelerating credit, and braking when bad loans mount, if credit expansion has to happen in a sustained manner to push economic growth.

“It is very important for credit expansion to happen at a consistent pace without the usual accelerator brake phenomenon that has been the characteristic of the Indian financial sector ever since liberalisation where, when the economy starts doing well, credit expands significantly oftentimes in the process. The credit underwriting norms are relaxed, and as a result, the seeds for a crisis are sown during good times,” he said.

Leveraging tech, data analytics

Underscoring the importance of technology and data analytics, Subramanian said banks and financial institutions which were very efficiently leveraging data and analytics had much lower bad loans, and their balance sheet expansion did not come under pressure. “Those banks were also able to grow consistently, and thereby contribute to the economy. That is the objective that the Indian BFSI sector must have,” he said.

The CEA said a lot of the private sector banks have used data and analytics for retail lending, but the usage of the same is very low for large ticket lending and SME lending. “The Indian BFSI sector should hire far more engineer MBAs to bring this technology driven in banking,” he said.

“In BFSI sector leaders need to be those that are technologically very well drained not only to be able to come up with models for retail lending, but also models for large-ticket corporate lending,” Subramanian said.



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4 NSE PSE Stocks With High Dividend Yield Up To 10%

Personal Finance

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Indian Oil Corporation

Indian Oil Corporation Limited, also known as IndianOil, is a government-owned company in India. It is owned by the Ministry of Petroleum and Natural Gas of the Government of India, which is based in New Delhi. As of 2021, the government firm is placed 212nd on Fortune’s Global 500 list of the world’s largest enterprises. With a net profit of $6.1 billion for the fiscal year 2020-21, it is the country’s largest government-owned oil firm.

Dividend History

Since August 27, 2001, Indian Oil Corporation Ltd. has declared 33 dividends. Indian Oil Corporation Ltd. has declared an equity dividend of Rs 12.00 per share in the last 12 months. At the current share price of Rs 106.35, this equates to an 11.28 percent dividend yield.

Coal India

Coal India

Coal India Limited (CIL) is a coal mining and refining company controlled by the Indian government. It is owned by the Ministry of Coal of the Government of India, which is based in Kolkata, West Bengal, India. It is the world’s largest coal producer and a Maharatna public sector initiative. India’s coal resources are estimated to be in excess of 326 billion tonnes. The reserves are sufficient to meet the demand for several centuries at the current rate of production.

Dividend History

Since February 18, 2011, Coal India Ltd. has issued 18 dividends. Coal India Ltd. has declared an equity dividend of Rs 12.50 per share in the last 12 months. This translates to a dividend yield of 9.0 percent at the current share price of Rs 138.85.

Power Finance Corporation

Power Finance Corporation

Power Finance Corporation is an Indian financial corporation that is owned by the Indian Ministry of Power. It is the financial backbone of the Indian power sector, having been established in 1986. The corporation, which was initially completely owned by the Indian government, became public in January 2007. The IPO was oversubscribed by more than 76 times, making it one of the largest for an Indian company’s initial public offering.

Since September 7, 2007, Power Finance Corporation Ltd. has declared 27 dividends.

Power Finance Corporation Ltd. has declared an equity dividend of Rs 10.00 per share in the last 12 months. This equates to a dividend yield of 7.95 percent at the current share price of Rs 125.85.

REC

REC

In India’s power industry, REC Limited, originally Rural Electrification Corporation Limited, is a public Infrastructure Finance Company. The firm is a government-owned corporation that finances and promotes power projects throughout India.

The company lends to the country’s Central/State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, Non-Governmental Organizations, and Private Power Developers.

Dividend History

Since September 8, 2008, REC has paid out 27 dividends. REC Ltd. distributed an equity dividend of Rs 13.00 per share in the previous 12 months. This amounts to a dividend yield of 8.95 percent at the current share price of Rs 145.25.

4 NSE Stocks With High Dividend Yield Up To 10%

4 NSE Stocks With High Dividend Yield Up To 10%

Company Last Traded Price Dividend Yield
IOC 106.35 11.28%
Coal India 138.85 9.0%
REC 145.25 8.95%
Power Finance Corporation 125.85 7.95%

Disclaimer

Disclaimer

Investing in stocks has the risk of financial loss. As a result, investors must proceed with prudence. Any losses incurred as a result of decisions based on the article are not the responsibility of Greynium Information Technologies, the author, or the brokerage houses. Due to the fact that Sensex has now crossed 55,500 points, investors should exercise caution.



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Reserve Bank of India – Tenders

Tenders

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E-Tenders are invited from eligible contractors / firms for the captioned work estimated to cost ₹20.93 lakh through the MSTC portal. The close bid date is 10.09.2021 at 1400 hrs.

NIT Number and Timeline is given below

S. No. Activity Tentative date
1. Date of Press-Web Advertisements 26.08.2021
2. e-Tender no. RBI/Patna/Estate/80/21-22/ET/109
3. Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through
www.Mstcecommerce.com/eprochome/rbi)
4. Date of NIT (along with complete tender document) available to parties to download 12:00 Noon of 26.08.2021
5. Date of Pre-bid meeting at Estate Department ,RBI Main Building, Patna(offline) 12:00 Noon of 02.09.2021
6. Earnest Money Deposit ₹ 41,867/-
7. Start Bid date – Date of Starting of e-Tender for submission of online Techno-Commercial Bid and Price Bid at
www.mstcecommerce.com/eprochome/rbi– 		12:00 Noon of 26.08.2021
8. Close Bid date – Date of closing of online e–tender for submission of Techno-Commercial Bid & Price Bid 1400 hrs of 10.09.2021
9. Date & time of opening of Part–I
(i.e. Techno- Commercial Bid) :
Part–II (Price Bid) : Part–II (Price bid) shall be opened at a later date that will be intimated to vendors earlier.		 14:30 hrs of 10.09.2021
10. Transaction Fee Payment of transaction fee through MSTC payment gateway/NEFT/RTGS in favour of MSTC LIMITED

Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website / MSTC Website and will not be published in the newspaper.

Sanjiv Dayal
Regional Director
(Bihar)

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CBI files chargesheet in Rs 209 crore bank fraud, BFSI News, ET BFSI

Banking & Finance

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JAIPUR: The Central Bureau of Investigation (CB) filed a chargesheet against 18 accused for their alleged involvement in causing a loss of nearly Rs 209 crore to the Syndicate Bank.

In a statement released Wednesday, the agency said the chargesheet has beeen submitted before the court of special judge, CBI cases in Jaipur. The agency named 18 people which included a chartered accountant and former officials of the Syndicate Bank, among others.

The CBI said that it had registered a case back in 2017, following a complaint from the bank’s regional office located in Jaipur, which alleged that 118 loans were sanctioned and disbursed from three branches of the bank located in Jaipur and Udaipur.

“The 118 loans were housing loans, term loans for the purchase of commercial property in World Trade Park (WTP), among others,” the agency said in the statement.

As per the agency, an Udaipur-based CA, identified as Bharat Bomb, along with his employees and others hatched a conspiracy with bank officials in Jaipur and Udaipur to sanction various credit facilities.

“The accused thereby cheated the bank to the tune of Rs 209.93 crore (approximately) on the basis of forged and fabricated documents, bills, quotations, certificates, etc. It was also alleged that several of the borrowers were found to be ordinary employees in firms owned by the CA and others, and (they were) not eligible for such high-value loans,” the agency said.

During its investigation, the CBI found that the accused had allegedly approached the bank’s Jaipur branch located on MI Road, seeking term loans for purchasing commercial properties and units at the World Trade Park ltd, on the basis of forged income tax returns showing inflated income of the borrowers, forged quotations, invoices, purchase orders, work orders, and forged CA certificates along with audited financial statements.

It was also alleged that the then manager of the bank’s MI Road branch recommended and the then AGM/branch head to sanction various credit facilities by violating bank guidelines and without exercising due diligence. These bank officials allegedly sanctioned term loans for the purchase of commercial properties, housing properties, and working capital term loans to various individuals, firms, and companies linked to the accused.

“Searches were also conducted at various premises of (the) accused. Further investigation is will be done to look into the role of the other accused,” the agency said.



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CBI files chargesheet in Rs 209 crore bank fraud, BFSI News, ET BFSI

Banking & Finance

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JAIPUR: The Central Bureau of Investigation (CB) filed a chargesheet against 18 accused for their alleged involvement in causing a loss of nearly Rs 209 crore to the Syndicate Bank.

In a statement released Wednesday, the agency said the chargesheet has beeen submitted before the court of special judge, CBI cases in Jaipur. The agency named 18 people which included a chartered accountant and former officials of the Syndicate Bank, among others.

The CBI said that it had registered a case back in 2017, following a complaint from the bank’s regional office located in Jaipur, which alleged that 118 loans were sanctioned and disbursed from three branches of the bank located in Jaipur and Udaipur.

“The 118 loans were housing loans, term loans for the purchase of commercial property in World Trade Park (WTP), among others,” the agency said in the statement.

As per the agency, an Udaipur-based CA, identified as Bharat Bomb, along with his employees and others hatched a conspiracy with bank officials in Jaipur and Udaipur to sanction various credit facilities.

“The accused thereby cheated the bank to the tune of Rs 209.93 crore (approximately) on the basis of forged and fabricated documents, bills, quotations, certificates, etc. It was also alleged that several of the borrowers were found to be ordinary employees in firms owned by the CA and others, and (they were) not eligible for such high-value loans,” the agency said.

During its investigation, the CBI found that the accused had allegedly approached the bank’s Jaipur branch located on MI Road, seeking term loans for purchasing commercial properties and units at the World Trade Park ltd, on the basis of forged income tax returns showing inflated income of the borrowers, forged quotations, invoices, purchase orders, work orders, and forged CA certificates along with audited financial statements.

It was also alleged that the then manager of the bank’s MI Road branch recommended and the then AGM/branch head to sanction various credit facilities by violating bank guidelines and without exercising due diligence. These bank officials allegedly sanctioned term loans for the purchase of commercial properties, housing properties, and working capital term loans to various individuals, firms, and companies linked to the accused.

“Searches were also conducted at various premises of (the) accused. Further investigation is will be done to look into the role of the other accused,” the agency said.



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NSE directs its members to stop sale of digital gold by Sept 10, BFSI News, ET BFSI

Personal Finance

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New Delhi: National Stock Exchange (NSE) has directed its members, including stockbrokers, to discontinue the sale of digital gold on their platforms by September 10. The direction came after capital markets regulator Sebi said that certain members are providing a platform to their clients for buying and selling digital gold.

Securities and Exchange Board of India (Sebi), through a letter dated August 3, informed the exchange that the said activity is in contravention of Securities Contracts (Regulation) Rules (SCRR), 1957, and the members should refrain from undertaking any such activities.

The SCRR rules restrict all members from engaging, either as principal or employee, in any business, other than that of securities or commodity derivatives, except as a broker or agent, not involving any personal financial liability.

Accordingly, NSE directed members not to carry out such activity and comply with the regulatory requirements at all times.

“Members, currently engaging in the activity, shall cease to undertake all activities in this regard, within one month from the date of this circular during which necessary communications, regarding the discontinuation, shall be made to the respective clients,” NSE said in a circular dated August 10.

TradeSmart Chairman Vijay Singhania said digital gold units are not issued by any regulated entity. There is no method to check whether the digital gold certificate is backed with physical gold or not.

Some jeweller firms like Titan and banks were known for selling digital gold.

Digital gold does not come under the definition of securities as defined in the Securities Contract (Regulations) Act 1956.

“The circular prohibits the dealing/offering digital gold-selling via Sebi registered entities, as it is not a security as mentioned above. It may be continued to be sold by the unregulated entities, subject to RBI directions if any,” Singhania said.

Kishore Narne, Head of Commodities & Currencies, Motilal Oswal Financial Services, said, “We were distributors of the digital gold product of MMTC-PAMP, with the backdrop of exchange issuing the directives for such product to be not sold by all stockbrokers of the stock exchange; we shall be discontinuing distribution of this product”.

According to him, MMTC-PAMP will continue to be the owner of the product and retain all the holdings of gold on behalf of clients and shall be offering all the redemption and sell-back options for all the existing clients.



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