Jewellers see increase in inquiries after RBI withdraws Rs 2k notes
However, there is no panic buying of the precious metal unlike the situation witnessed in 2016 during demonetization
image for illustrative purpose
Jewellers in India, the world's second largest gold consuming country after China, have started receiving more inquiries for purchase of gold or silver immediately after the Reserve Bank's announcement to withdraw Rs 2,000 notes from circulation.
However, there is no panic buying of the precious metal unlike the situation witnessed in 2016 during demonetisation, jewellers body GJC said on Sunday. In fact in the last two days, the actual gold purchase has been less in exchange of Rs 2,000 notes due to strict Know your Customer (KYC) norms although sources said some jewellers have started charging a 5-10 per cent premium, taking the gold prices to Rs 66,000 per 10 grams level. Currently, gold prices have corrected to around Rs 60,200 per 10 grams level in the country.
"There have been a lot of inquiries about purchasing gold or silver with Rs 2,000 notes, hence the higher footfalls on Saturday. However, due to strict KYC norms actual purchase has been less," apex industry body All India Gem And Jewellery Domestic Council (GJC) Chairman Saiyam Mehra said. There is "no such panic" and footfalls have also settled down as the RBI has kept a larger window of four months as the deadline for withdrawing the pink notes from the market, he said.
On May 19, the Reserve Bank of India (RBI) announced withdrawal of Rs 2,000 currency notes from circulation but gave public time till September 30, to either deposit such notes in accounts or exchange them at banks. It has asked banks to stop issuing Rs 2,000 notes with immediate effect. Mehra further said implementation of goods and services tax (GST) and Bureau of Indian Standard (BIS)' hallmarks has encouraged jewellery manufacturers to become organised and carry out formal business.
"Large-denomination currency notes are normally required to deal in cash, which has now become insignificant in India's jewellery industry and consumers are more inclined towards digital formats. Therefore, the withdrawal of Rs 2,000 currency notes will not have a major impact on India's gold and jewellery business," he added.
