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Organised Jewellery Companies May Gain From Ban on Risky Deposit Schemes



Jewellery firms in the organised sector are hoping to increase their share of jewellery purchase advance scheme market following the government’s move to ban high risk deposit schemes by builders, jewellers and others that don’t have specific regulatory approval.

Industry executives said the promulgation of Banning of Unregulated Deposit Schemes Ordinance 2019 would lead to a shift from unregulated monthly gold deposit schemes of unorganised jewellers to schemes offered by organised players. The firms that hope to gain from the ordinance include Kalyan Jewellers, PC Jeweller, Joyalukkas and Senco Gold & Diamonds. A segment of customers understand the benefits of availing such schemes and we believe that there is a potential to grow our revenues from our jewellery advance schemes by 25%,” said Rajesh Kalyanaraman, executive director, Kalyan Jewellers.

Run by us are regulated and duly approved and sanctioned by the ministry of corporate affairs, and we file returns in the manner mandated under the Act, with the Registrar of Companies (RoC),” he said. “We, therefore, believe that our vast network of 102 showrooms in India and over 650 My Kalyan stores are poised to drive growth for our Dhanvarsha and Akshaya Purchase Advance Schemes.”

The ordinance defines a deposit as an amount of money received through an advance, a loan, or in any other form, with a promise to be returned with or without interest. Such deposit may be returned either in cash or as a service, and the time of return may or may not be specified. Further, it defines certain amounts which shall not be included in the definition of deposits such as amounts received in the form of loans from relatives and contributions towards capital by partners in any partnership firm. Currently, nine regulators oversee and regulate various deposit-taking schemes. These include the RBI, Sebi, ministry of corporate affairs and state and union territory governments.

Courtesy: Economic Times

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