Gold investors in India have a new investment option called Electronic Gold Receipts (EGRs), complementing existing methods such as purchasing physical jewellery, gold coins, and investing in gold exchange-traded funds (Gold ETFs). The National Stock Exchange of India (NSE) has announced the launch of Electronic Gold Receipts (EGRs), tradable on its EGR segment, like stocks and bonds, and backed by physical gold, which can be redeemed at any time.
What Is an Electronic Gold Receipt?
Simply put, an EGR is a digital proof of gold ownership. With the introduction of NSE’s EGR platform, the Gold Exchange, which SEBI first announced in 2022, has finally seen the light of day. The Gold Exchange is a national platform for buying and selling Electronic Gold Receipt (EGR) in India. The stock exchanges can either set up a new stock exchange for the trading of EGR or launch EGR in the existing exchange infrastructure, but in a separate segment. On the NSE, Electronic Gold Receipts will be traded on the EGR Segment.
What’s New for Investors
As a holder of an Electronic Gold Receipt, the investor will participate in gold ownership. The gold is safely stored in a vault, your ownership is recorded in your demat account, and you can convert it to physical gold at the time of redemption.
Another big advantage of EGRs is the ‘one nation, one price’ concept — unified pricing that makes gold trading more straightforward with one price nationwide.
EGRs are open to all retail investors, jewellers, bullion traders, and even refineries. They are easily tradable on exchanges and provide a more convenient option compared to physical gold, offering liquidity and ensuring the quality of the gold held.
How to Invest in EGRs
On the EGR Segment of NSE, there are two purity options: ‘EGR – 999 Purity’ and ‘EGR – 995 Purity’. One can start small — denominations range from 100 milligrams to 1 KG for both options, making it accessible to a wide range of investors.
Technically, EGR is an electronic receipt issued by the Vault Manager against the gold deposited with them. Each of the EGRs is backed by physical gold, which is stored with the Vault Managers.
It is entirely the buyer’s choice whether to take physical delivery of gold or not. The buyer can continue to hold the EGR in a demat account for further trading or take physical delivery of gold from the Vault Manager. Note that the Vault Manager can levy charges for the withdrawal of gold.
EGRs are traded on NSE’s dedicated EGR segment from Monday to Friday, between 9:00 a.m. and 11:30 p.m. The extended trading window allows Indian investors to take advantage of international market movements. Settlement on NSE’s EGR segment occurs on a T+1 basis, meaning transactions are finalised the next working day.
Disclaimer: This article is intended for general awareness only and should not be construed as investment, financial, or tax advice. Electronic Gold Receipts are a new investment product regulated by SEBI and subject to market volatility and related risks. The EGR segment on NSE is a recently launched platform and investors should carefully read all scheme-related documents and disclosures before investing. Readers are strongly advised to consult a SEBI-registered investment advisor before making any decisions related to EGR or gold investments.