With the date of compulsory hallmarking drawing near, the gold trader has sought a clarification from the Bureau of Indian Standards (BIS) on the fate of the inventory of 20-carat, 23-carat and 24-carat purity lying with jewellers.
The government has announced hallmarking compulsory from June 16.
The trade has informed the BIS that since March 2020, due to the pandemic situation and lockdowns, a majority of jewellers could not dispose of their non-hallmarked stock. The trade has told the bureau that it would require more than a year to dispose of this.
Jewellery associations have estimated that out of 5,000 tonnes of gold inventory available with jewellers, 3,000 tonnes are of non-prescribed caratage (20, 23 and 24 carats), which when melted into the grades as prescribed by the BIS — 14, 18 and 22 carats — would cause a loss of 300 tonnes of gold, equivalent to Rs 1.5 lakh crore.
The jewellers have requested the BIS to include 20, 23 and 24 carats jewellery within the ambit of hallmarking to avoid this loss.
“This caratage issue needs to be addressed as many states in the country like Maharashtra and others use 20- and 23-carat gold for jewellery,” said Ashish Pethe, chairman of the All India Gem & Jewellery Domestic Council who has attended the meetings of a committee formed by the government on hallmarking.
Trade executives also expressed concern over the spread of assaying and hallmarking centres (AHCs), and said consideration of the number of centres per state was not a sufficient criterion to gauge the adequacy of existing AHCs.
The trade has highlighted to the committee that 33% of the total districts were covered by BIS-recognised AHCs and the concentration of such AHCs was centred mostly on the gold jewellery manufacturing centres. It has also been suggested by the gold trade that in regions with inadequate AHCs, the AHC be requested to collect articles from jewellers, and the expenses be borne by the AHC.
The gold industry has also raised concerns on the gold jewellery that is deposited at the banks and NBFCs against which loans are sanctioned. In case of default by customers, as per Reserve Bank of India guidelines, the lenders should auction the jewellery as received.
“We have sought a clarification on the matter that if the purity of the jewellery to be sold by the banks is not as per the fineness stated in the Indian standards, then what should be the course of action to be followed by the banks,” Pethe added.