Print Edition - 2017-10-24 | MONEY
Govt fails to monitor Tihar bullion market
Oct 24, 2017-
The Department of Supplies Management did not monitor the quality of gold and silver jewellery and utensils sold during Tihar, the festival when bullion sales skyrocket, stating it does not have a guideline to do so.
The country’s gold and silver sales hit an estimated Rs652 million during this Tihar, the five-day festival, which concluded on Saturday. However, the department, which has the legal mandate to monitor trading activities, did not conduct inspection of the bullion market. This provided leeway to bullion traders to work against the interest of consumers.
The government did not show keen interest to monitor the bullion market although the Consumer Protection Act 1998 has given it full authority to conduct necessary investigation and inspection or make arrangement for doing so in case there are reasonable grounds to believe that any person is engaging in any unfair trading activity to adversely affect the rights and interests of consumers. This provision means the government does not need a separate guideline to inspect bullion trading.
In the past, the government’s market monitoring teams had found jewellery makers using excess chemicals, tampering with weighing machines and selling low quality bullion. The market monitoring teams had also found excess use of cadmium in silver jewelleries. Kumar Prasad Dahal, director general of the department, said they did not conduct any market inspection during this festival due to absence of related law.
“As the working guideline on trading of precious metals is being drafted by the Ministry of Supplies, we are in a dilemma about carrying out market inspections. Because of this, we did not send our teams to monitor bullion trading activities in the market,” Dahal said.
The government had started drafting a new guideline on trading of precious metals around four years ago after bullion traders protested surprise market inspections. As a part of the protest at that time, the Federation of Nepal Gold and Silver Dealers’ Association, the umbrella body of bullion traders, did not fix the bullion price for many days, while jewellers stopped purchasing gold from commercial banks.
The traders have been saying the government should not monitor the bullion market in the absence of a standard monitoring guideline, as “it is a special type of business”. In response, the government has also agreed to put market monitoring activities on hold for now.
The guideline, however, has not been finalised till date, as the government and traders have failed to agree on many contentious issues. Two of them are purity tolerance level and amount of chemicals that could be used to fix jewelleries.
The government side has been saying the purity tolerance level of bullion should be one percent, meaning gold and silver should be 99 percent pure. However, traders are demanding that the threshold be fixed at 1.5 percent.
Similarly, traders are demanding that the government allow use of up to 11 percent of chemicals in jewelleries, while the government is pushing for 8 percent.
Published: 24-10-2017 08:39