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Mumbai: After suspending trading in e-series contracts on 6 August, National Spot Exchange Ltd (NSEL) issued a circular on the same day stating that the purpose of the circular was to safeguard 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 10 March, 2012, circular on its website, NSEL states, “The unit holders can convert their e-gold units in to physical gold in the form minimum 1 gram coin." (http://tinyurl.com/m6563hd).

Mint Money spoke to delivery centres for e-gold, including Delhi, Mumbai, Kochi and Chennai. All said that 1gram e-gold can be converted to physical gold. When contact, an NSEL official, who is not an authorized spokesperson, reiterated this.

What brokers and anaysts say?

Brokers and analysts had a different view.

“E-gold can be converted into physical form only if you have at least 8 gram of gold," said C.P. Krishnan, whole-time director, Geojit Comtrade Ltd. “Any quantity below that can’t be converted."

Mint spoke to at least seven analysts and brokers who act as service providers for investors.

All of them, including Renisha Chainani, commodity analyst, capital markets (individual clients), Edelweiss Financial Services Ltd, and Ashok Mittal, alternate president, Commodity Participants Association of India, said that no e-gold of lot size less than 8 gram can be converted to physical gold.

What should you do?

Considering that there is a circular issued and published on the website, NSEL can let you convert 1 gram e-gold into physical gold. However, the actual execution part doesn’t seem to have happened, if brokers and analysts are to be believed.

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