Traders to central bank: Make gold distribution transparent
KATHMANDU, NOV 22 -
Gold dealers have accused commercial banks of not selling gold to district-level traders transparently as per the central bank directives. They said random distribution of the yellow metal fueled black marketing and created shortage.
On Wednesday, a team of bullion traders representing Nepal Gold and Silver Dealers Association (Negosida) and Nepal Gems and Jewelry Association demanded that the central bank make gold distribution transparent, assuring the percentage allocated for district-level traders reaches to the ‘real gold traders’. The associations have urged the Nepal Rastra Bank (NRB) to increase the current quota from existing the 15 kg to 35 kg a day.
As per the NRB directive, banks have to sell 40 percent of their daily sales (15 kg) from their branches at Birtamod, Biratnagar, Janakpur, Birgunj, Bhairahawa, Nepalgunj, Dhangadhi and Pokhra. Remaining 60 percent is allocated for the Bagmati Zone. “Banks are selling gold in violation of the NRB directive. The metal is being bought by wrong traders, not those who are the actual retailers,” said Tej Ratna Shakya, president of Negosida. “But the central bank is least bothered to conduct cross checks.”
In the initial stages of government-imposed quota system, only four commercial banks — NIC, Standard Chartered, Nabil and NMB — were involved in gold trading. Currently, there are 23 banks to import and sell gold . Commercial banks sell gold to traders under the recommendation of gold dealers’ associations or district-level gold associations.
However, banks not having branches in NRB-fixed areas sell gold even from their Kathmandu branches as per recommendation of traders associations, which is against the set rule. “Some Kathmandu banks might have releases gold for markets out of Bagmati, but this does not mean all banks are the same,” said a bank official. During the meeting with bullion traders, Lila Prakash Sitaula, executive director of NRB’s Foreign Exchange Management Department, assured the traders that their demand for increasing the gold import quota would be considered and a discussion would be held with the Nepal Bankers’ Associations on distribution issue.
Due to the rise in demand amid the wedding season, traders have been demanding that the quota be increased. Demand for the yellow metal goes as high as 30 kg a day in the local market during wedding season. Traders said the quantitative limitation of 15 kg a day was creasing shortage and the situation in districts was more serious.
Source: The Kathmandu Post
