KATHMANDU, AUG 20 -
Nepal Rastra Bank (NRB) has issued a new directive on import and sale of gold.

Ending the monopoly of Nepal Gold and Silver Dealers’ Association (NEGOSIDA), the central bank on Friday authorised Nepal Gold and Silver Art Association (NEGOSAA) and Nepal Gem and Jewellery Association (NEGJA) to issue recommendations to retailers for gold procurement from commercial banks.  NEGOSAA and NEGJA had been lobbying with NRB for the rights citing that the monopoly of NEGOSIDA was fuelling gold shortage in the market. The two gold traders’ associations claimed that some of the gold wholesalers were stashing the metal so that it could be sold whenever the gold price soared. 

“We are happy with NRB’s move as this will help make the gold supply system transparent,” said Dwarika Shankar, vice-president of NEGOSAA.

The new provision, which will be effective Sunday, has also allowed retailers to procure gold directly from the bank. Earlier, gold retailers were required to procure the precious metal from wholesalers.        

As per the new instruction, NEGOSIDA will have the authority to recommend 50 percent of the daily 10 kg quota of gold while NEGOSAA and NEGJA would share the recommendation rights for 25 percent each. The central bank has also mandated the Nepal Bankers’ Association to release 60 percent of the daily gold quota inside Bagmati zone and the remaining portion to other parts of the country.

The new provision also restricts gold traders’ associations from making recommendations for more than one kg of gold and five kg of silver.

 “This new provision has ended the domination of wholesalers who used to procure up to five kg of gold alone. In a way, gold will directly reach the retailers in a transparent way,” said Ramesh Maharjan, president of NEGJA.    

Khem Raj Biswakarma, treasurer of NEGOSAA, said the associations are preparing to form a price stipulation committee and market monitoring committee comprising representatives of all three associations at the initiative of NRB.

Meanwhile, NEGOSIDA has objected to NRB’s directive dubbing it ‘impractical’. “This will create more problems in gold supply, especially to the bottom level customers,” said Tej Ratna Shakya, president of NEGOSIDA. “We do not know how the new provision will  work.”


Posted on: 2010-08-21 09:10

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