Which of the following statements regarding Electronic Gold Receipts (EGRs) is correct?

EGRs can be converted into physical gold through a prescribed process.

EGRs are only available in 1-gram denominations.

EGRs are subject to a 3% GST at the time of trading on the stock exchange.

EGRs are regulated by the Reserve Bank of India (RBI).

Under the current regulatory framework, which act governs the notification of Electronic Gold Receipts as securities?

Securities Contracts (Regulation) Act, 1956

Foreign Exchange Management Act, 1999

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20 July 2026

Electronic Gold Receipts (EGRs)

Electronic Gold Receipts are a specific, SEBI-regulated financial instrument that directly relates to investment models and the functioning of statutory regulatory bodies in the Indian financial market.

Notes

Electronic Gold Receipts (EGRs) are exchange-traded securities representing ownership of physical gold stored in SEBI-regulated vaults.
EGRs were notified as securities under the Securities Contracts (Regulation) Act, 1956, in December 2021.
Regulatory framework established by SEBI (Vault Managers) Regulations, 2021, and a Comprehensive Risk Management Framework issued in April 2022.
Trading occurs on stock exchanges (NSE/BSE) during market hours (9 a.m. to 11:30 p.m./11:55 p.m.).
Settlement follows a T+1 cycle; investors require both trading and demat accounts.
Available in two purity standards: 999 (99.9%) and 995 (99.5%).
Denominations range from 10 mg to 1 kg.
Benefits include transparent price discovery, standardized quality, liquidity, and elimination of storage/purity concerns.
No GST on EGR trading; 3% GST applicable only upon conversion to physical gold.
Investors incur brokerage, demat, and vault-storage charges; physical delivery incurs additional testing and transportation costs.

Part of a longer story

This is day 1 of 3 in Development and Regulation of the Gold Exchange and Electronic Gold Receipts, which has been running since 20 July 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

Discuss the significance of Electronic Gold Receipts (EGRs) in formalizing the gold market in India and enhancing transparency in price discovery. 150 words

Attempt this — 150 words in 8 min

0 / 150 words 8:00
How does the introduction of the Gold Exchange and the regulatory framework for EGRs contribute to financial inclusion and the efficient management of gold assets in the Indian economy? 250 words

Attempt this — 250 words in 11 min

0 / 250 words 11:00

Prelims

Which of the following statements regarding Electronic Gold Receipts (EGRs) is correct?

Under the current regulatory framework, which act governs the notification of Electronic Gold Receipts as securities?

Syllabus

Topics

Sources

Electronic Gold Receipts:a new way to own gold

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