Kathmandu, January 16
While rampant smuggling of yellow metal in the market hints at the prevalence of ill practices in the bullion sector of Nepal, jewellers have lately begun to openly overcharge customers.
According to Mani Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Association, some jewellers are ‘charging up to Rs 4,000 more per tola on gold ornaments’.
“The demand is so high that clients are more than ready to pay the higher price,” said Shakya, citing the higher price at which jewellers are purchasing gold from unofficial sources and which gets passed on to the consumers.
According to him, the demand for gold has surged to almost 45 kg a day against the daily import quota of 15 kg.
According to him, while majority of jewellers have stopped taking new orders for gold ornaments, some are manufacturing them for customers in urgent need by either purchasing gold jewellery in bulk from other customers or from ‘other sources’ at higher rate.
The demand for yellow metal surges in December and January, as the period is considered auspicious for weddings and other ceremonies, according to the Hindu calendar.
In the meantime, Department of Supplies and Consumer Welfare Protection — the government body responsible for controlling market anomalies — has not carried out any inspection in the bullion market since three years ‘due to delay in introducing monitoring guideline’.
“We have finalised and forwarded the draft of monitoring guideline for the jewellery industry to the Ministry of Supplies. We’ll intensify our monitoring of the bullion sector as soon as the guideline is endorsed,” Gokul Dhital, director general of DoSCWP said, adding that the department will, nonetheless, look into the issue of customers being overcharged by jewellers.
While traders keep citing low supply for the rise in cases of such unethical behaviour, official data on the actual demand of gold in the domestic market is non-existent.
Nepal Rastra Bank increases import quota of gold for commercial banks to 20 kg per day during ceremonial and festive seasons and relaxes it to 15 kg per day at normal times.
However, private sector players say the daily demand of raw gold reaches up to 50 kg a day during festive and ceremonial seasons and is at least 25 kg at normal times.
“We are holding talks with the Ministry of Commerce to increase the daily gold import quota to 20 kg and we’ll take a decision in this regard soon,” said Chinta Mani Siwakoti, deputy governor of NRB.
Meanwhile, Madhav Timalsina, president of Consumers’ Right Investigation Forum, said overcharging customers is illegal, irrespective of the reason, and has to be controlled.
“Government apathy and weak law enforcement in the country has encouraged traders to engage in such practices.”
A version of this article appears in print on January 17, 2017 of The Himalayan Times.