KOLKATA: Gold jewellery sales in the country have fallen 15-20% since the Rs 12,900-crore Nirav Modi-Mehul Choksi fraud came to light in early February as consumers have become cautious about purity of gold and are holding back their purchases, traders said.
“Reports have come out that synthetic diamonds have been sold as original diamonds by the Gitanjali Group.
This has created afear psychosis among customers who are enquiring about the quality of jewellery,” said Nitin Khandelwal, chairman at All India Gems & Jewellery Trade Federation (GJF). Many customers may also be waiting for hallmarking of gold to become mandatory, traders said. The government had indicated that hallmarking would become mandatory from January but it was delayed because the rules were not in place.
“Mandatory hallmarking is expected to be rolled out anytime,” said Harshad Ajmera, president at Indian Association of Hallmarking Centres, adding that Bureau of Indian Standards has already worked out the rules and submitted them to the law ministry. The size of the gold jewellery market in India is to the tune of Rs 3 lakh crore.
In what is billed as the biggest fraud in the Indian banking system, Punjab National Bank has accused diamond jewellers Nirav Modi and his uncle Mehul Choksi of availing credit from overseas banks using fraudulent guarantees made in collusion with bank employees. Choksi’s Gitanjali Group could not be immediately contacted for comments.
Surendra Mehta, national secretary at India Bullion & Jewellers Association, confirmed the fall in demand because of the multi-crore fraud. “However, we are hopeful the situation will begin to improve from the end of this month,” he said. “Our guess is that people will shift from diamond-studded jewellery to plain gold jewellery if hallmarking is made mandatory for all jewellers,” Mehta said.