SRO will ensure industry gains consumers’ trust: WGC India chief
Wed Aug 07 2024
After a long wait, the gold industry has formed the much-needed Self-Regulatory Organisation to bridge trust deficit of both the regulators and consumers. The move comes when the Government has an import duty on gold to discourage smuggling. The industry was even finding it difficult to avail bank credits. World Gold Council played a key role in framing best practice norms and bringing the industry on one platform. Sachin Jain, Regional CEO-India, WGC spoke to businessline on the way forward. Excerpts:
Q What will be role of SRO?
Generally, there’s a lot of trust deficiency in the bullion industry. The intent of SRO is to suggest good practices and set a code of conduct across industry including bullion dealers, refiners, manufacturers and retailers. The code of conduct will be different for each segment of players across the value chain. The SRO will accredit members after conducting due audits. Currently, there are 15-20 big SROs across industries including mutual funds, automobile and information technology. The role of the SRO is to bridge the gap between the regulator and the industry. The Government is also mooting that every industry should have a self-regulating body.
Q How to become a member of the Indian Association for Gold Excellence and Standards (IAGES)?
Each industry player has to apply to become an IAGES member. It will be open for all irrespective of their business size. They have to go through independent audit and earn the logo. At the end of the process, the consumer will gain trust in the industry. We have formed the Board which will have members from the three associations – IBJA, GJEPC and GJC. There is scope to get few more associations on board. We will appoint an independent CEO who will have his own team and drive the entire initiative under the guidance of the Board. It will be an independent organisation and will be run professionally.
Q What will be the role of WGC?
The role of WGC is to bring the entire industry on one platform and help drive transparency. WGC along with national industry associations will also be investing to drive the acceptance and popularity of IAGES. Though I cannot reveal the exact investment numbers, it will be substantial enough to sustain it for next few years to ensure there is enough infrastructure available for the SRO to operate. We will also spend money on communication to the end consumers. Many people in the industry want to follow best practices but they do not know how to go about it. So, the SRO will handhold them in adopting the guidelines framed and approved by the IAGES Board.
Q What are the specific norms to be followed by the members?
Members have to give assurance that there is no child labour. They have to ensure that the working conditions are good, labourers are taken care of and are paying taxes on time. Over time, adoption of SRO guideline can also bring down use of smuggled gold. The SRO right now is for entities selling in the domestic markets, but this kind of accreditation will also help exporters. An IAGES member exporting to other countries will have a higher validity than non-member of the SRO.
Q Will the SRO also ensure purity of gold?
The government has already rolled out mandatory hallmarking. The SRO accreditation will be given only to retailers selling only hallmarked jewellery. That will be part of the code of conduct. We will also ensure that the billing is done in a proper manner and no cash transactions are entertained. The code of conduct will be widely published in WGC website.
Q Will the SRO fill in the gaps in Hallmark Unique Identification (HUID) adoption?
The step taken by the government on HUID is phenomenal, but to implement it across the country is going to be a challenge. I am sure BIS is working on way to penalise people who are not doing it correctly. SRO will only help the industry in abiding by the BIS norms.
Q How the SRO ensure regular audits across the country?
We will lay out separate audit framework. The entire industry is already following the right practices but they were not getting the accreditationand this will be provided by the SRO.
Q What is the incentive for lowly rated jewellers to remain with IAGES?
India will become the youngest country with about 70 per cent of population being millennials and the way they perceive gold will be different. If the industry is not standing for transparency, it will impact their own business. We will be investing more money to ensure the popularity of IAGES, and this will send consumers the message that the SRO member’s business is audited by a third-party. It will be a good incentive for any jeweller building business for future. It will also be a good branding for a small jewellers to consumers.
Q Will the SRO work on digital gold?
We have given a framework for digital gold players as well. So, they can be a member of SRO. The bigger issue with digital gold is that it is an unregulated product. I hope the government will start regulating it sooner than later.
Source: https://www.thehindubusinessline.com/