Author: Paul Ploumis25 May 2015 Last updated at 08:01:58 GMT
NEW DELHI (Scrap Monster): In an attempt to take early advantage of the proposed gold monetization scheme, Muthoot Exim-the precious metals arm of Muthoot Fincorp, has decided to set up gold recycling centres across the country. The centres known as ‘Muthoot Gold Point’, aim to recycle gold jewellery into bars at nominal cost.
The company has already been running a ‘Gold Point’ centre in Coimbatore for the past two months. The centre has collected nearly 10 kilograms of old gold from around 200 customers since its opening. The huge success of this Center has led to opening of more such centres across the country. According to Keyur Shah, CEO, Muthoot Exim, the company plans to launch 20 ‘Gold Point’ centres by March 2017 and recycle at least 2 tonnes of gold jewellery into bars.
The “Gold Point’ model intends to collect old gold from customers. The centers will be equipped with state-of-the-art X-ray gold purity tester. The customer will be paid the value of gold as per market price after deducting 2% on purity as administrative charges. The collected gold will then be melted in the presence of customer and later supplied to organized jewelers. All normal transactions require the customer to fill out a detailed Know Your Customer (KYC) form. Also, transactions exceeding 2 lakhs will require PAN card details.
The company stated that the proposed plan is ‘ambitious’, though the draft lacks mention about finer details. If the scheme becomes a success, the existing 350 BIS-authorized hallmarking centres may find it difficult to handle the load.
Gold recycling is still an unorganized sector in the country. There exists no standardized procedure to ascertain the value of old gold. The rate of deduction on old jewellery varies from jeweler to jeweler. On an average, the customer loses about 15% on the value of old gold.