The Hindu Business Line : CWC to store gold too at its warehouses — Facilities at two locations in every State

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CWC to store gold too at its warehouses — Facilities at two locations in every State

Our Bureau

Ahmedabad , Nov. 19

THE next time a farmer goes to deposit his produce of wheat or potatoes at a Central Warehousing Corporation (CWC) godown, he may do well to carry his gold as well. The Government-owned company is setting up facilities to store gold at its warehouses across the country.

"We will be setting up vaults at our godowns where the farmers can deposit their gold. Over time, we hope that the deposit receipt will become a negotiable instrument for the holder," said the CWC Chairman, Mr S.K. Tuteja.

CWC will set up gold storage facilities in at least two locations in every State and the total number of such vaults could rise to about 100 in a phased manner.

Location advantage: "Our advantage is that most of our warehouses are located inside the city limits. The cities have actually grown around our facilities. It is not as if one finds CWC warehouses in remote locations outside towns," Mr Tuteja said.

The facility will help members of the three commodity exchanges in the country, NMCE, NCDEX and MCX, to use the CWC facilities for futures trading in the yellow metal.

As for CWC, it will throw up a new line of business with minimal investment as it already has most of the required infrastructure. The company already handles silver.

Mr Tuteja said there was no plan to offer facilities to store diamonds, as there were issues of standardisation with the precious gemstones.

Good safety record: CWC uses private security guards, mostly ex-servicemen, and Mr Tuteja said the company was already known for its safety record.

"At any point of time, we have stocks of foodgrains valued at Rs 6,000 crore. Our customers will not have any reservations about parking their gold with us," he said.

CWC, along with the National Multi Commodity Exchange will also set up a new entity for storing and trading commodity receipts on the lines of stock depositories, Mr Tuteja said.

"Once the Government passes the required laws to make warehousing receipts a negotiable instrument, there will be a need for a depository company. We are planning to gear up for futures trading by setting up a depository for commodity receipts."

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