ALL INDIA GEMS AND JEWELLERY ALL INDIA GEMS AND JEWELLERY TRADE FEDERATIONTRADE FEDERATION

SWARNA BACHO ABHIYAAN

GJF.GJF, asks our fraternity to suspended sales of bullion bars and coins across all retail, wholesale and bullion outlets.

� If successful even partly, this will result in bringing down 20 -30% of gold imports (200 + tons valued at $10-15 billion).

�We have been fairly successful in this as of date with the largest chains already withdrawing coins from stock. Not entertaining orders. One chain reported that this was Rs 1000 crore business stopped. But happy doing so to help.

� This will act as a catalyst to help achieve this goal.�We will regulate thru a voluntary action. No laws.

PRESENTING

THE SWARNA BACHHAO ABHIYAANA Plan to Unlock Idle Gold Reserves in India

By

THE SWARNA BACHHAO ABHIYAAN

Objective

The objective of the scheme is to bring the IDLE gold with the public into circulation.

Thereby reduce import of gold by galvanizing participation of Jewellers & Private Institutions/ NBFCs/ Refiners interested from across India.

A private initiative by the industry.

THE SWARNA BACHHAO ABHIYAAN� Gold jewellery and bars and coins come in various

denominations, forms, with gemstones, variety of metals, and construction.

� Jewellery held may be culturally rich and some exceptional workmanship.

� If not handled with care the value may be lost forever.

THE SWARNA BACHHAO ABHIYAAN

� Only a jeweller will be able to assess, advice the public what to hold, what to sell and what to melt.

� This involves knowledge to advice a client and infrastructure to remove the gems and return them to a client.

THE SWARNA BACHHAO ABHIYAAN

� Then melt, assay, refine, convert into acceptable denomination bars, hallmark then submit to the listed private institution who may be interested in partnering this programme.

� Jewellers will act as agents for collection across the country.

THE SWARNA BACHHAO ABHIYAANThe programme will be run on a secure web portal developed for this purpose using Microsoft/ SAP/ ERP.

The web portal will be licensed to jewellers, operating partner (Refiner?), NBFC, and public thru a password.

All hosted n the cloud.

Details may be accessed thru a password by client, by NBFC, partner, Jeweller, with periodical third party audits.

This is envisaged to be built by the partners in the programme.

A.Step by step procedure will be set on the web portal:. for acceptance, . issuing XRF testing certificates, . melting, . testing certificates after melting, . weighing before and after melting, . issuing gemstones and other residual metals back to client

thru the receipt making and issuing process, . and final bill with the holographed jewellers certificate.. Similarly at time of maturity registering the certificate and

issuing the gold.

SCHEME STRUCTURE� Customers approach the jewellers with their gold jewellery /

bar for depositing under the scheme.

� The jewellers follow set process of testing and checks and informs the customer with respect to purity and weight of the gold jewellery / bar.

� Service Fees as prescribed are paid by the Customer for testing, refining etc. to the Jewelers. (0.50% suggested).

� The Jeweler melts & refines the gold jewellery / bar and sends the same to nominated refiners for refining and hallmarking it to 995 purity gold bars.

SCHEME STRUCTURE

� The Jeweler deposits the certified gold bars with the operating partner/ NBFC.

� The operating partner/ NBFC lends the gold to jewelers / manufacturers for manufacturing activities and earns interest on gold loans @ 6% pa or sells the gold in the market.

LIMITS FOR QUANTITY OF DEPOSITS � Minimum limit will be 100 gms (gross) 995 purity

for acceptance of gold under the scheme Higher quantity of gold in multiple lots of 50 gms will be accepted 995 purity. (Jewellers will play key role in making specific lot sizes).

� In case of individuals and HUF the maximum amount of gold will be 1 Kg per person that can be deposited under the scheme.

� There will be no upper limit for any other categoriesof depositors.

PERIOD OF DEPOSITS � The minimum period of deposit under the scheme

will be 1 to 3 years with lock in period. � The maximum period of deposit will be 7 years. � The depositors will have rights to renew their deposits

at the time of maturity.

RATE OF INTEREST - PAYMENT

� The interest rate to the depositors will be in the range of 3% to 4% depending on the tenure of the deposit.

PROCEDURE FOR DEPOSIT OF GOLD

SERVICE FEES �The depositors will have to pay service fees of 0.50% of gold value to the jeweler for his services.

�Or fixed service fees based on the slabs fixed according to the quantity of gold deposited by the depositors.

BENEFITS FOR DEPOSITORS � Tax Exemptions suggested: � Income tax exemption on the interest received under this scheme� Capital gain tax exemption in case where cash is taken back instead

of the gold after the maturity.� Wealth tax exemption on the value of gold deposited under the

scheme till maturity. � Transfer to be permissible at nominal costs.

� Premature payment will be permitted after a lock-in period of 3 year with a penalty on applicable interest rate

PROCEDURE FOR DEPOSIT OF GOLD

MATURITY / REPAYMENT �On the maturity repayment of principle will be paid either in gold or equivalent rupees. � The depositor will also have an option to surrender the certificate with the nominated jeweler against purchase of jewellery or bars.

LOAN FACILITIES AVAILABLE TO DEPOSITORS � The depositors will be eligible to take loan from the banks/NBFC against the gold deposit certificate after the lock in period. Housing loans at concessional rates?

THE SWARNA BACHHAO ABHIYAAN

Run this scheme for 3 years and review.

1-3 years of imports cost will be saved. SBA will save $30-60 billion.

Publicity to this programme will be thru the 3,00,000 jewellers across the country, giving success a greater chance.

In similar way as the Utaranchal flood appeal.

CURRENT SITUATION…

� IF ‘INVESTMENT GOLD’ IS REDUCED THE IMPORTS WILL DRAMATICALLY REDUCE FROM 1000 TONNES TO 600 TONNES.

� Plus the SBA is likely to unlock about 50 to 100 tons pa.

. Jeweller gets 0.50% of deposit value as service charges from depositor.

. Depositor earns net 2.50 to 3.50% pa plus gets Capital Gains exemption, interest tax free, and no wealth tax.

. NBFC earns interest on lending gold 6%.

. GJF gets 0.50% from NBFC.

. NBFC earns net 2.50 to 3.50%.

Costs of infrastructure of ERP/ insurance is extra, to be funded in addition.

Will this work to unlock? It is the jeweller connect that is likely to be the key to unlocking.

This is meant to be a profit making venture. The Government is open to giving some concessions if the trade will set this up.

Public Private or Private Participatory Venture.

SWARNA BACHHAO ABHIYAAN

To

CREATE AN INDIAN SUCCESS STORY IN UNLOCKING & MOBILISING

IDLE PUBLIC HOLDING OF GOLD.2013.

THANK YOU.