The Navratri festival has brought no cheer to the bullion trade as gold sales in Mumbai have fallen by almost half, with buyers shying away from purchasing the precious metal. Jewellers blame the recently-introduced KYC (Know Your Customer) rules under the Prevention of Money Laundering Act (PMLA) for the downfall.
According to city jewellers, daily sales have come down to Rs58-90 crore from the average sale of Rs175 crore.
“We used to generate at least Rs175 crore of sales daily, which used to even peak to Rs350 crore during special occasions like Dhanteras and Dussehra. Now, we reach the range of Rs85-90 crore daily,” said Kumar Jain, vice president, Mumbai Jewellers Association.
He said that one of the major reasons for the decline in sales is the mandatory furnishing of KYC details when buying gold of Rs50,000 and above. “Many people fear harassment from Income Tax officials if they have to disclose these purchases. Hence people are not buying gold. In addition to this, the majority of the purchasers are women who save money over a period, and are not comfortable with KYC rules,” said Jain.
The slump is evident, as majority of the gold shops which skip their weekly off during Navratri did not do so this time due to lack of trade. Inflation may be another reason, as it has affected household incomes. “People complain that they have no money to buy gold due to the massive hike of prices of essential commodities. For people, gold is luxury and is the last priority. The current situation is such that people can hardly manage their monthly household expenses,” said Pankaj Kothari, owner, Palak Jewellers.
{{/usCountry}}The slump is evident, as majority of the gold shops which skip their weekly off during Navratri did not do so this time due to lack of trade. Inflation may be another reason, as it has affected household incomes. “People complain that they have no money to buy gold due to the massive hike of prices of essential commodities. For people, gold is luxury and is the last priority. The current situation is such that people can hardly manage their monthly household expenses,” said Pankaj Kothari, owner, Palak Jewellers.
{{/usCountry}}While the wedding season is all set to begin, most consumers are going for exchange of gold (exchanging of old gold with new) to escape KYC norms.
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