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The World Gold Council (WGC) is looking to put in place a prescribed set of principles, or a code of conduct, called the Retail Gold Investment Principles, for the retail jewellery sector in India. The move is expected to bring in much needed transparency in the sector, which has been facing severe perception issues following reported incidents of fraud by some companies.
According to PR Somasundaram, Managing Director India, WGC, the global principles have already been put up on the Council’s website, inviting comments from all the stakeholders. The comments will be interpreted and implemented based on the requirements and challenges of the domestic gold industry.
Global exercise
“We are working on bringing the industry together on the Retail Gold Investment Principles, which is a global exercise. We are doing this to improve transparency in the retail industry,” Somasundaram told BusinessLine on the sidelines of a gem and jewellery summit organised by the Indian Chamber of Commerce here recently.
This will basically provide a platform for stakeholders, and those willing to be part of the initiative can conform to the code of conduct and bring in some standardisation and transparency in the industry, he added.
While the principles will be global, the standards will be locally tailored and put in place in consultation with all the stakeholders. “We are in the process of forming a steering committee. We have had one or two rounds of discussions in the last two months and will be announcing the steering committee members by April-May,” he said.
As a part of this initiative, the Council will conduct outreach programmes in various cities and get in touch with jewellers big and small.
Monitoring mechanism
Putting in place a monitoring mechanism would be crucial to ensure the success of the platform. Once a company or a jeweller signs up on the platform, it has to ensure that nothing comes from the grey market and all efforts, including a strong supply chain, are put in place so that the customer feels safe.
Once the code is strictly adhered to, it will build confidence in the minds of not just customers but also bankers, who have been shying away from lending to the sector due to the high risk involved, said Somasundaram.
Citing the example of the London Bullion Market Association (LBMA), he said: “The LBMA has done it in the refinery industry...they have a monitoring system — they even do blind samples. The entire bullion banking in the world relies on LBMA. We can do it in retail and improve the overall trust in the retail jewellery and gold industry.”
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