An Indian company is aiming to help ordinary people cut out the middle man when they want to buy and sell gold bars converted from jewellery, according to reports.

The National Spot Exchange (NSE) has developed a standardised and transparent market for the trade of the estimated 20,000 to 25,000 tonnes of gold held in Indian households, its managing director and chief executive Anjani Sinha told news agency AFP.

Using a spot exchange, he said, prices can be fixed and guaranteed by supply and demand, allowing traders to quote their own buying and selling price.

At present, those looking to convert and sell jewellery have to rely on merchants who charge a "hefty commission" to melt the metal down and find a buyer.

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The NSE is currently working with the Indian Bullion Markets Association to find refineries that melt jewellery down to the international 995 standard of purity. The company has approved four so far and hopes to be working with 15 refineries by the end of the year.

The foundation stone of the NSE was laid in February 2005. The market is based in Mumbai.

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