Electronic Gold Receipts: A new way to own gold

In May 2026, the National Stock Exchange of India (NSE) introduced Electronic Gold Receipts (EGRs), a new exchange-traded segment for buying and selling gold in electronic form. The initiative aims at improving transparency in gold pricing, standardising quality and providing investors with a regulated and secure way to own the yellow metal, while making India’s gold market more efficient. It enables investors to own physical gold without the need to store it at home or in a bank locker.

On September 28, 2021, the Securities and Exchange Board of India (SEBI) approved the framework for Gold Exchange and SEBI (Vault Managers) Regulations, 2021. The Centre notified EGRs as securities under the Securities Contracts (Regulation) Act, 1956, in December 2021. Further, on April 11, 2022, SEBI issued a ‘Comprehensive Risk Management Framework’ for EGRs. Together, they laid the regulatory foundation for EGR trading in India.

In September 2022, the Bombay Stock Exchange (BSE) received SEBI’s final nod to unveil the EGR segment. It became the first bourse in India to launch EGR on October 24, 2022 on Muhurat trading session. Initially, BSE introduced two EGR products backed by 995 and 999 purity gold with trading in multiples of 1 gram and physical delivery in multiples of 10/100 grams.

Electronic Gold Receipts (EGRs) are exchange-traded securities representing ownership of physical gold (specified purity) stored in SEBI-regulated vaults. They can be held electronically in a demat account, bought and sold in different denominations on the bourse and converted into physical gold via prescribed process.

EGRs can be traded from Monday to Friday during market hours. Trading is available from 9 a.m. to 11:30 p.m., or up to 11:55 p.m., during the U.S. daylight saving period. Like shares, EGRs follow a T+1 settlement cycle with the receipts credited to the buyer’s demat account the next trading day. Retail investors, jewellers, bullion traders, refiners, institutional investors and other eligible market participants can buy EGRs via registered stockbrokers. Investors need both trading and demat accounts to buy and sell EGRs.

EGRs combine the advantages of physical gold with the convenience of electronic investing. As a SEBI-recognised security, each EGR is backed by a specified quantity of gold of a defined purity, securely stored in SEBI-regulated vaults. This offers a transparent and standardised way to own gold while removing concerns over purity and personal storage.

One of the biggest advantages is EGRs enable transparent price discovery via exchange trading, ensuring uniform price across India at any given point in time. Investors can buy and sell EGRs during market hours, hold them in a demat account and choose from denominations based on budget. The gold backing an EGR is stored safely in regulated vaults, so investors need not worry about its purity.

Those who prefer physical gold can convert EGRs into gold whenever needed. EGRs offer liquidity, settlement guarantee, fungibility and can help diversify investment portfolios.

The EGRs are available in two purity standards: 999 (99.9% pure gold) and 995 (99.5% pure gold). In each purity category, investors have six different denominations such as 10 mg, 100 mg, 1 g, 10 g, 100 g and 1 kg. Whether you want to test the waters with a tiny investment or accumulate over time, EGRs offer denominations to suit first-time buyers and seasoned investors.

Apart from the cost of purchasing EGRs, investors may also incur brokerage, demat (depository) and vault-storage charges and other applicable transaction charges. Those opting for physical delivery of gold may also have to bear purity testing and transportation charges. There is no GST for EGR trading. However, investors opting for physical delivery must pay 3% GST on gold value.

Buying and selling EGRs is only one part of the story. The real questions lie behind the scenes: Why did India create a Gold Exchange? How does physical gold b...