With the Central Bank set to submit a report on illegal trade in gold jewellery to the Centre, a jewellery merchants’ body which monitors the trade in Karnataka has swung into action to regulate the price of gold across the state.

The Karnataka State Jewellery Traders and Workers Associations’ Federation president Mr B Ramachari told Business Line that the self regulation is being put in place as there is an imminent move by the Reserve Bank of India to submit a report to the Centre on proliferation of black money through illegal trade in gold and gold jewellery.

Mr Ramachari said his federation had requested the RBI not to go ahead with the report which could in fact hit their business hard. The federation had also promised that they will put in place regulations which would prevent illegal trade.

Based on the report, the Centre could start policing the activities of all jewellery and gold merchants in Karnataka which could affect the entire operations of their business. “They could cross-check all accounts, raid shops, and this will make it difficult to carry on the business smoothly,” he said.

The Federation proposes to bring in uniformity in gold rates by sharing with merchants thrice a day of the price at which the sale of gold has to be made. “We will declare the prices once in the morning, once afternoon and once in the evening so that they can make their sales based on the uniform price,” Mr. A.R.S.Babu, General Secretary of the Federation said.

Once implemented, it will make Karnataka the second state after Kerala to follow the system of uniform pricing for gold and gold jewellery.

The federation has about 176 taluk associations, 30 district associations and 32 city associations in its fold. “If any action is taken against us based on the RBI report, our business will be badly affected. We know where the mistake has been made, and we have told the regional RBI that we will sort out the whole thing ourselves,” he said.

This move to declare a uniform gold price across the state is expected to reduce illegal trade in gold. “There are many black money holders who engage in gold business to convert their black money to white,” Mr. Ramachari pointed out.

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