Ban on deposit schemes to hit jewellery industry, may cut gold sales by 25%

Jewellers rue loss of cash flow at a time when credit is getting costly

The Banning Unregulated Deposit Schemes Bill, 2018, proposed by the central government, will hit the jewellery business by a 25 per cent reduction in sales, and lead to consolidation in the industry.

The Union Cabinet in late February approved the Bill for introduction in Parliament. It is aimed at curbing illicit deposits, such as ponzi schemes. As its name suggests, once the Bill is passed, it would ban all unregulated deposits, replacing the current legislative-cum-regulatory framework that has considerable time lags.

Deposit schemes run by jewellers would also be hit by this.

Several jewellers incorporated under the Companies Act 2013