India’s digital precious metals industry has set up a self-regulatory body called the Digital Precious Metals Assurance Council of India (DPMACI) to enhance consumer protection in the growing digital gold and silver ecosystem. Per an official statement, it has named Nirupama Soundararajan — who’s also the CEO and cofounder of the Policy Consensus Centre — its independent chairperson.
ET had reported on May 1 that leading industry players were working towards setting up a self-regulatory body for the sector.
The council includes companies such as MMTC-PAMP, SafeGold, Augmont, PhonePe, BharatPe, MobiKwik, Gullak, LendenClub, and Cred.
The organisation will introduce operational and governance standards for digital gold and silver platforms. These include appointing independent audit firms to verify that physical precious metal holdings match customer balances and whether assets are stored with independent custodians or vault providers.
The framework will also lay down norms for vaulting, storage, insurance, and disclosures. Customer assets will be protected through insured vaulting systems and their funds routed through segregated accounts monitored by an independent trustee, the statement added.
Regulators have recently raised concerns about the sector operating outside its ambit. In November, Sebi cautioned investors against equating digital gold with regulated products such as gold ETFs (exchange traded funds) and other gold-linked investment instruments.
According to the council, member platforms will be required to maintain a 1:1 physical backing of customer holdings of gold and silver, verified through periodic independent audits. Holdings will also need to comply with London, UAE, or Indian good delivery standards (certifications regarding purity, weight, etc).
“By proactively instituting a common framework of transparency and rigorous standards, we are building a foundation for sustainable growth that prioritises consumer trust. Institutionalising practices like independent audits and clear custodial safeguards is good for the entire sector, as it reinforces consumer protection and market credibility,” said Soundararajan in the DPMACI statement.
The council also plans to introduce an ombudsman framework for grievance redressal and customer complaint resolution within specified timelines, and has also launched a portal detailing governance standards and compliance processes.
Industry estimates suggest that nearly Rs 3,000 crore is invested in digital gold every month. The sector’s total assets under management are estimated to be between Rs 15,000 crore and Rs 20,000 crore, backed by nearly 15 tonnes of gold stored in vaults against these investments, ET had reported earlier.
