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HindustanTimes Thu,25 Dec 2014

Monthly gold installment scheme set to lose sheen

Jyotsna Jalali   August 04, 2014
First Published: 21:33 IST(4/8/2014) | Last Updated: 21:37 IST(4/8/2014)

With the ministry of corporate affairs announcing monthly gold installment scheme as illegal, there is a kind of uncertainty among people who subscribe to these schemes. While most of the jewellers are indecisive about the fate of such schemes, there are some jewellers, who rather than refunding money, are asking customers to buy gold in lieu of the amount they have already invested.

Shilpi Bhanot, a resident of Sector 16, said: “We are a group of 20 women and have invested in a gold kitty with a local jeweller. So far, we have just paid two instalments and rather than refunding the money, the jeweller is asking us to buy equal amount of gold. Now, the issue is that the money we have given so far is not enough to buy a decent ornament. We are in a fix and don’t know what to do.”

The schemes which are run by different jewellers give an option to people to invest each month for a year and generally last instalment is paid by the jeweller. At the end of the year, the investor can buy gold with the total amount he had invested under the scheme. Rajiv Sachdev, president of Chandigarh Jewellers Association, said: “We have got to know about the issue but as of now we have not taken a call on the same. There are hundreds of jewellers who have started such schemes. Our executive body will meet in the next week and only then we will be able to take a concrete decision on the same.”

While big brands such as Tanishq, Orra have conveyed it to their customers that they can take the refund; the issue is more with the local jewellers. There are many who are oblivious to the development and are pacifying their customers by saying that there are no issues with the investments. Bhushan Mahajan, owner of New Bombay Jewellers, Sector 20, said: “We haven’’t done away with any of such schemes as no official body has intimated us of such a decision.”

With the Centre putting a cap on the rate of interest on monthly instalment scheme run by jewellers, the state industry is finding it to be a virtual ban. The local jewellers have become nervous about continuing the scheme after the government started sending letters to some asking them to stop such schemes.

Meanwhile, some jewellers said resident should not panic as they would come out with a modified scheme, similar to existing investment schemes.

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