Kerala becomes the First State to Introduce Uniform Gold Price Based on Bank Rate
Kerala becomes the first state in India to launch uniform gold price based on the bank rate. The decision to introduce uniform price on 916 purity 22 carat gold has been taken at a meeting between officials of Malabar Gold and Diamonds, one of the largest gold and diamond retail chains in the country and key members of All Kerala Gold and Silver Merchants Association which sets the board rate for gold.
Commenting on the development, Mr. MP Ahammed, Chairman, Malabar Group said, “We are extremely happy to be a part of this momentous occasion. We would like to thank all members of the jewellery trade in Kerala for coming together and launching a standardized gold rate across the state to safeguard the interest of the consumers and bring in price transparency to the trade. At Malabar Gold and Diamonds, we have shown the way by launching uniform gold price across all our stores in the country with our 'One India One Gold Rate' policy. Being a top gold consuming state in the country, Kerala can set the stage for a countrywide roll-out of uniform gold price.” MP Ahammed also demanded that the selling price of gold should be unified everywhere in the country.
The gold rate should be uniform across the country based on bank rate. However, in most states, gold is priced Rs.150-300 per gram extra over the bank rate. In Kerala, gold used to be sold at different prices on a particular day. Uniform gold price based on bank rate offers an opportunity to the consumers to purchase gold at a reasonable and transparent price.
According to Mr. Ahammed, there should be a system to determine the price of gold based on the bank rate on a specific day in the country. Bank rate on gold, GST and other taxes including import duty are the same across India. For example, on November 4, 2022, the bank spot rate of 916 (22 carat) gold was Rs. 1,640 per ounce, the bank premium was Rs. 3.50, the import duty was Rs. 6,67,467 per kg and the bank cost per gram of gold was Rs. 5,008. Adding all these, the bank rate of November 4, 2022 amounts to Rs. 4610 per gram of 916 gold. Thanks to the price standardization, jewellers in Kerala now charge the same price as the bank rate for gold.
