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Saving schemes banned in Gold Jewellery shops! Central Government Order
Posted on: 25/Jul/2014 2:43:24 PM
The central government has banned the saving schemes offered and run by the gold jewellery shops throughout India.
Most gold jewellery shops all over India offer and operate saving schemes for buying gold jewellery. The customers have to pay a certain monthly amount. The scheme is for a duration varying from 15 months to 36 months.
Once the duration is complete and installments are paid, they can get some gold jewellery. Note that the savings are exchanged only for gold and not for other things.
The scheme is hugely popular and thousands of people join and invest. It is estimated that around 1.50 crores individuals are subscribers in this scheme.
The number of jewellery shop operators with this scheme is said to be over several lakhs.
Naturally, huge sums of money, said to be in lakhs of crores, are involved in this business.
The central company affairs department has banned this from 1st April, 2014. Several restrictions were also imposed as per New Company Law.
The order stipulates:
- The shops cannot operate the schemes as they please.
- They cannot have limitless subscribers.
- The savings scheme duration cannot exceed 11 months.
- In case it exceeds 11 months, the investment amount will be restricted to just 25% of the total jewellery worth in the shop.
Following this, several shops have started dropping these schemes. They have returned the money invested by the subscribers. Some shops have restricted the duration of the scheme to 11 months.
The government has planned to complete implementation of this order before next April.
The president of the jewellery shops owners’ association informed that the order will apply only to companies which are limited or private limited. It will not apply to privately owned jewellery shops. Even the daily wage earners managed to save and invest on the scheme to buy some jewellery. They will be affected by this order.
There are about 8 to 9 lakhs investors in Tamil Nadu.
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