Udaipur: HDFC Bank, one of India’s premier private sector banks, has marked a significant milestone by becoming the first domestic bank to execute a gold forward deal from the Gujarat International Finance Tec-City (GIFT City). This pioneering transaction was conducted through HDFC Bank GIFT City International Banking Unit (IBU) in collaboration with Hindustan Platinum Pvt. Ltd., a globally renowned refiner and producer of high-purity precious metal products and industrial services.
The regulatory framework now permits onshore entities with exposure to gold prices to hedge their risks through GIFT City, a move aimed at bolstering India’s position in the global bullion market. By leveraging this framework, HDFC Bank has taken a notable step forward in developing the GIFT City bullion ecosystem. The bank’s IBU operates as both a trading and clearing member on the Indian International Bullion Exchange (IIBX), an essential platform for gold and silver trading in India.
The successful execution of this deal highlights HDFC Bank’s commitment to enhancing financial offerings within the burgeoning ecosystem of GIFT City. The deal not only underlines the bank’s innovative approach but also demonstrates its readiness to support industries that rely on precious metals for their operations.
Expressing his thoughts on this achievement, Mr. Arup Rakshit, Group Head – Treasury at HDFC Bank, stated, “We are delighted to announce the successful execution of the first gold forward deal from GIFT City. This achievement underscores our commitment to leveraging the opportunities offered by GIFT City to deliver innovative and efficient financial solutions. HDFC Bank will endeavour to provide tailored hedging solutions to the gems and jewellery sector, as well as various industrial sectors, to effectively manage their risks.”
GIFT City, located in Gandhinagar, Gujarat, has been conceptualized as a global financial and IT services hub, hosting international exchanges, banking units, and financial services organizations. With facilities like IIBX, GIFT City aims to position India as a key player in the global bullion trade.
The Indian International Bullion Exchange, an integral part of this ecosystem, provides a centralized platform for trading gold and silver with greater transparency and efficiency. This initiative aligns with India’s broader goals to strengthen its bullion market and reduce dependency on international exchanges for price discovery and hedging mechanisms.
As a nominated agency for bullion trade, HDFC Bank has long played a pivotal role in facilitating gold imports and providing financial solutions to industries reliant on precious metals. The bank is currently in the process of becoming a special category client on IIBX, which will allow it to further expand its capabilities in the bullion market. This move will enable HDFC Bank to offer a wider range of services, including gold and silver forward contracts, from its IBU in GIFT City.
The bank’s efforts are particularly significant for sectors like gems and jewellery, where fluctuations in gold prices can have a profound impact on profitability and financial planning. By providing forward contracts and hedging solutions, HDFC Bank aims to help businesses mitigate risks associated with volatile metal prices, ensuring smoother operations and financial stability.
The gold forward deal was executed in collaboration with Hindustan Platinum Pvt. Ltd., a globally recognized name in the refining and manufacturing of precious metal products. Hindustan Platinum’s expertise in high-purity products and industrial applications makes it an ideal partner for this landmark transaction. This collaboration signifies a new era of cooperation between financial institutions and industrial players within the GIFT City framework.
The successful execution of the gold forward deal from GIFT City opens new avenues for Indian businesses and financial institutions. For industries heavily reliant on precious metals, such as jewellery manufacturing and industrial applications, the ability to hedge price risks locally represents a game-changer. Additionally, this development strengthens India’s position in the global bullion market, reducing reliance on international exchanges and fostering a self-reliant bullion ecosystem.
HDFC Bank’s initiative reflects the broader trend of Indian financial institutions embracing innovation and technology to create value for their clients. The bank’s strategic focus on GIFT City underscores its vision to remain at the forefront of financial innovation and contribute to the development of India’s financial markets.
HDFC Bank Executes First Gold Forward Deal from GIFT City
