Jewellery traders criticise unsystematic monitoring

KATHMANDU, MAY 31 -

Gold and silver traders have criticised the government for conducting market monitoring on an ad hoc basis. According to them, the government does not have any logical criteria regarding the quality standard that they are required to maintain.

Prompted by stepped up government scrutiny of the jewellery and bullion market, the Federation of Nepal Gems and Jewellery Association (Fenegja) and the Nepal Gold and Silver Dealers Association (Negosida) have slammed the unsystematic actions of the government and agreed to maintain functional unity on the issue.

Recently, inspection teams from the Department of Commerce and Supply and the Nepal Bureau of Standard and Metrology (NBSM) found that gold traders have been

selling underweight and substandard gold jewellery. The authorities have also initiated legal action against the offenders.  

The two associations said on Thursday that they would face present and future problems together. Speaking at the programme, Negosida president Mani Ratna Shakya said they had joined hands to address the problems of bullion traders and to promote the market for precious metals. “The tie-up is aimed at solving problems seen in pricing, distribution and market monitoring,” he added.

The organizations have identified inadequate supplies, inconsistency in the quality standards defined by the authorities and ad hoc monitoring as the main problems of the sector. “We are not against the government’s market monitoring. But our only demand is that it should be carried out regularly after properly defining the quality standard,” said Shakya.

There are an estimated 12,000 jewellery outlets in the country. According to the federations, even a small jewellery shop in outlying regions requires at least a tola of gold daily. However, the government has been selling only 20 kg of gold daily through designated banks.

According to the traders, they have also been hit by the banks’ policy to stop providing them a cutting margin while selling gold . “We used to get a cutting margin of 100-150 mg per 1 kg which the banks have stopped at present,” said Fenegja president Ramesh Maharjan.

He urged the government to introduce advanced technology to maintain standards. According to him, the government should install a well equipped lab to permit prompt testing of the quality of gold . “A trader has to wait the whole day to have his gold tested at the NBSM laboratory,” he added. Giving an example of the US government allowing 4 percent tolerance for gold jewellery, he said that the zero tolerance policy was unfair.  

The traders also blamed the government for not maintaining uniform standards with regard to quality. “The banks sell 24 carat gold of 99.50 purity to the traders while the monitoring authority says that the gold sold by the traders should have 999.9 purity,” said Maharjan.

Source: The Kathmandu Post