Home / Money / Calculators /  DYK: NSEL says you can convert 1g e-gold into physical form

After suspending trading in e-series contracts on 6 August, National Spot Exchange Ltd (NSEL) issued a circular on the same day stating that it was committed to safeguarding investors’ interest. The circular stated that “people holding stock can apply for converting to physical and the same will be facilitated by the exchange". However, there was no clarity on how many grams can be converted into physical form. So are you confused about the conversion of e-gold to physical form?

What does NSEL say?

In a circular, dated 10 March 2012, NSEL on its website stated, “The unit holders can convert their e-gold units into physical gold in the form of minimum 1g coin" (http://tinyurl.com/m6563hd). Mint Money spoke to NSEL delivery centres for e-gold, including Delhi, Mumbai, Kochi and Chennai and got the same response from everywhere. The delivery centres said that 1g e-gold can be converted to physical gold. When contacted, an NSEL official, who is not an authorized spokesperson, reiterated this.

How can you convert? So if you have, say, 6g e-gold, you can get it converted to 6 gold coins of 1g each. This is because the minimum size that NSEL offers in physical form is 1g and the next size is 8g and 10g coins.

What brokers and analysts say

Brokers and analysts have different views. They say that e-gold can be converted into physical form only if you have at least 8g of gold. Mint Money spoke to at least seven analysts and brokers who act as service providers for investors. All of them said that no e-gold of lot size less than 8g can be converted to physical gold.

The charges

According to the circular issued on the NSEL website, the making and packaging charges for coins/bars of 1g is 100, for 8g and 10g it is 400 and for 100g and 1kg it is zero. If you convert electronic units to physical units you will have to pay value-added tax and octroi or any other local taxes, as applicable, at the place of delivery. All such taxes and levies will be payable at the clearing rate (closing price of the e-series unit) on the date of execution. Considering that there is a circular issued and published on the website, NSEL can let you convert 1g e-gold into physical form. However, the actual execution part doesn’t seem to have happened, if brokers and analysts are to be believed.

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