MCX eases silver delivery norms: Will imported silver lose dominance? Explained

The Multi Commodity Exchange of India (MCX) has revised its good delivery norms for gold and silver refiners. The move is aimed at enabling more domestic silver refiners to deliver bullion through the exchange platform.

In a circular dated May 17, MCX said it has revised the eligibility criteria and empanelment process for domestic silver refiners under its “MCX Good Delivery Norms for BIS-Standard Gold/Silver”. The exchange has also invited eligible domestic silver refiners to apply for empanelment.

Relief on BIS licence requirement

The biggest relief for domestic silver refiners is related to the Bureau of Indian Standards (BIS) licence requirement.

Under the revised norms, silver refiners will be exempt from BIS accreditation requirements during the empanelment process. However, refiners that get empanelled will have to obtain a valid BIS licence within 12 months after BIS finalises the accreditation process for domestic silver refineries.

The same relaxation has also been highlighted under the eligibility criteria section of the circular.

The relaxation is significant because India’s silver refining industry has long sought a clearer framework for exchange deliveries. The change could help more local refiners participate in MCX delivery contracts and reduce dependence on imported good delivery bars.

Push for ‘Aatmanirbhar’ bullion ecosystem

MCX said the revised framework is aligned with the government’s “Aatmanirbhar” vision and is intended to enable delivery of gold and silver refined in India.

The exchange noted that it already accepts bullion bars from London Bullion Market Association-approved refiners and select UAE good delivery refiners for deliveries on its platform. The revised norms now seek to create a formal pathway for Indian refiners as well.

The revised framework may help domestic refiners compete with imported LBMA-approved silver bars that currently dominate exchange deliveries.

Strict compliance and audit framework retained

While MCX has relaxed the BIS condition for silver refiners, the broader compliance framework remains stringent.

Applicants will still need to meet several operational and financial conditions, including:

• Minimum net worth of Rs 10 crore
• Minimum three-year refining track record
• Average yearly refined production of at least 3 tonnes
• Valid NABL accreditation
• Responsible sourcing compliance aligned with OECD guidelines

The exchange said refiners will undergo technical qualification audits and financial audits before approval. These audits will cover refining standards, assaying capability, BIS compliance, balance sheet verification, working capital position and regulatory compliance.

MCX also said empanelled refiners will remain subject to annual inspections, surprise audits and random testing of bullion samples.

Focus on traceability and responsible sourcing

The revised framework places strong emphasis on responsible sourcing and supply-chain traceability.

Refiners will need systems to track sourcing risks, maintain transaction records for at least three years, ensure payments move through official banking channels and comply with anti-money laundering rules.

The exchange has also mandated that silver bars delivered through MCX contracts must meet a fineness level of 999 parts per thousand or above, with no negative tolerance allowed on declared silver content