The Gem and Jewellery Council (GJC) has urged the government to make jewellers with good track record agents of banks for gold-monetisation scheme (GMS).
The council believes this will not only promote the scheme among customers, but also check the purity of gold deposited by customers and access its value to perfection.
Online platform
Anantha Padmanaban, Chairman, GJC, in an interaction with BusinessLine, said jewellers can inform banks daily, through an online platform, the amount of gold that has been deposited under the scheme. Banks can start earning by lending the gold deposited by customers back to the jeweller. The operational cost for jewellers will come down substantially. The arrangement will cut off the processing, transportation and vault charges, he said.
While jewellers can claim a small fee for processing the gold deposited by customers, the bigger gain for them will be the availability of gold at a competitive cost, added Padmanaban, who is also Managing Director of NAC Jewellers.
The suggestions are part of GJC’s proposals to the government for reviving interest in GMS. It has also recommended the government to allow customers to deposit gold up to 500 grams without KYC, as most of the gold deposits in lockers are inherited by the present generation who do not want it to reflect as their earnings. Besides, farmers owning gold are reluctant to deposit gold under GMS as they cannot comply with KYC norms.
If the GJC proposals are implemented, Padmanaban said domestic gold prices will come down by 5-7 per cent and rupee will appreciate as gold imports will fall substantially.
Shaankar Sen, Vice-Chairman, GJC, said the council is expecting the government to announce a revised policy to revive GMS before the Budget.
Of the 22,000 tonnes of gold lying idle in India, GMS has managed to garner only two tonnes in the last three years, he said.
If the revised GMS is announced, it can easily garner about 15 per cent of the gold lying idle, and can meet more than India’s annual demand of 700-800 tonnes, he added.
On why the government is not willing to cut the import duty on gold from 10 per cent despite various industry representations, he said, the government collects ₹30,000 crore as customs duty on gold, but has been ignoring the fact that smuggling is increasing and money is being diverted to anti-social elements.