Indian digital gold providers are intensifying book audits and vault inspections. Firms like SafeGold, MMTC Pamp, and Augmont Gold are establishing industry standards through the Digital Precious Metals Assurance Council of India (DPMACI) to ensure 100% physical backing and enhance consumer trust following regulatory scrutiny.
Digital gold providers in India are significantly increasing their internal audits and conducting physical verification of their gold reserves. This proactive measure aims to bolster transparency and self-regulation within the burgeoning digital gold sector, which now boasts approximately 80 million customers nationwide.
Enhanced Audits and New Council
Industry insiders reveal that some companies have engaged prominent auditing firms like EY for financial audits and Grant Thornton India for physical vault inspections. These steps are part of a broader industry initiative to address concerns raised by markets regulator Sebi, which in November last year characterized the sector as "unregulated." Leading players, including SafeGold, MMTC Pamp, and Augmont Gold, have collectively formed the Digital Precious Metals Assurance Council of India (DPMACI). This council is setting stringent standards to guarantee that every consumer purchase of digital gold is fully backed by physical gold, supported by regular independent audits and robust grievance redressal mechanisms.
Digital Gold's Market Position
Digital gold, an investment allowing individuals to buy, hold, and sell 24-karat physical gold digitally without immediate physical possession, continues to be a popular saving product. Data from the World Gold Council indicates it remained a high-transacting category on the Unified Payments Interface (UPI) in May. Despite a brief dip in demand following a rise in gold import duty to 15% from 6% on May 13, demand recovered swiftly. Kavita Chacko, research head at the World Gold Council, noted that while transaction values and volumes saw a monthly decline in May, volumes still surpassed the 16-month average, signaling sustained investor interest.
Investor Confidence and Standards
Bhargav Vaidya, an independent gold trade analyst, emphasized the importance of company credibility for small retail investors engaging with digital gold. DPMACI's established standards mandate that all bullion sold must adhere to recognized good delivery benchmarks like BIS or LBMA. Furthermore, independent auditors are required to conduct physical vault audits at least twice annually, including random destructive testing to verify weight and purity within agreed tolerances.
The India Bullion & Jewellers Association (IBJA) has also initiated a self-regulatory division for the digital gold trade, with Surendra Mehta, national secretary of IBJA, confirming ongoing discussions with members to appoint auditors.