SRO will ensure industry gains consumers’ trust: WGC India chief

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 the 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.

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 organization and will be run professionally.

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.

Members have to give assurance that there is no child labour. They have to ensure that the working conditions are good, laborers 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.

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 the WGC website.

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 penalize people who are not doing it correctly. SRO will only help the industry in abiding by the BIS norms.

We will lay out separate audit framework. The entire industry is already following the right practices but they were not getting the accreditation and this will be provided by the SRO.

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 jeweler building business for future. It will also be a good branding for a small jewelers to consumers.

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.