COIMBATORE: The National Stock Exchange’s (NSE) newly launched Electronic Gold Receipt (EGR) platform could reshape India’s gold ecosystem, reduce import dependence and unlock the value of idle gold holdings, according to Sriram Krishnan, chief business development officer of NSE.
Speaking to TNIE, Krishnan described EGRs as a “revolutionary step” towards the dematerialisation of physical gold, comparable to the transition from physical share certificates and bonds to demat accounts.
Highlighting India’s growth trajectory, he said the country continues to remain an attractive investment destination, driven by its young population, expanding capital markets, growing manufacturing base and robust infrastructure development. He noted that India’s economy, currently valued at over $4 trillion, could reach $10 trillion within the next decade, opening up significant opportunities for investors and businesses.
Explaining the rationale behind EGRs, Krishnan said the initiative seeks to bring a substantial portion of the country’s idle gold into the formal financial system. India imports nearly 700 tonnes of gold annually, and even partial mobilisation of domestic holdings could help reduce foreign exchange outflows, he added.
“We have enormous quantities of gold stored in homes, temples, institutions and investment products. If a portion of this gold is converted into EGRs and circulated within the economy, it can significantly reduce import dependence,” he said.
Krishnan emphasised that EGRs are not intended to replace jewellery ownership, but to offer a secure and productive avenue for surplus gold held in the form of coins and bars. By converting physical gold into electronic receipts, investors can eliminate concerns over storage, theft and authenticity, while also gaining the potential to earn returns through lending.
He said EGR holders would be able to lend their gold to borrowers, thereby creating a new income stream. Gold exchange-traded funds (ETFs), asset management companies and individual investors could also benefit from the system, he added.
Addressing concerns over public acceptance, Krishnan drew parallels with initial scepticism around dematerialised shares, noting that investors eventually embraced the system once they experienced its convenience, transparency and security.
“The same transition can happen with gold,” he said, adding that the NSE has put in place stringent standards for quality assessment, refining, storage and traceability. Investors converting gold into EGRs would be assured of purity, authentication and secure custody under a regulated framework.
Krishnan expressed confidence that, as awareness grows, EGRs would encourage Indians to view gold not merely as a traditional store of wealth, but as a productive financial asset capable of generating returns while contributing to the wider economy.
