A recent change in rules in India that bars the purchase of gold ornaments without hallmarking has created confusion among the common man who counts inherited gold among personal assets. One region particularly hit by the new rule is Kerala, which has a reputation for its people’s craze with gold. Predictably, the new rules have become a talking point in the southern state.
Almost all Malayali families boast of a treasure chest of gold ornaments passed from earlier generations. The traditional ornaments are cherished more for their antique value than market price. The girls who have inherited those ornaments flaunt them for occasions such as weddings.
Forget 916 standards, these inheritances come from a period when there was no official record to measure the purity of gold. What will happen to those ornaments after the new regime is in place? How can one exchange them for contemporary designs? How much will it cost? Questions galore.
The country has made BIS 916 compulsory for gold to introduce a unified criterion in the gold market. Gold ornaments will be hitherto classified into three in accordance with the quality of the yellow metal – 22 karat (22K916), 18 karat (18K750) and 14 karat (14K585).
Come January 15, 2021, gold retailers would be barred from selling gold ornaments that do not carry the branding of any of these standings as determined by hallmarking institutions recognized by the Bureau of Indian Standards. With the new rules kicking in, gold ornaments bought from different places in the country are expected to be of uniform quality. Customers will be able to ensure that they have received all the gold they have paid for. Jewellers who refuse to obey the rules can be fined up to Rs 1 lakh.
Gold price, not antique value
Most of the inherited ornaments are unlikely to have any BIS certification. At best, in case you happen to possess 22 karat ornaments, it might have some brandings such as 22/10,22/21.
The Bureau of Indian Standards was set up only in 1986. It took another 14 years to bring about hallmarking to analyse the quality of gold ornaments in 2000. The BIS oversee the establishment of numerous quality detection centres across the country. Yet the mark of quality was not made compulsory on gold ornaments sold to the people. Of about 3 lakh gold retailers in India, a great many of the small-scale vendors have yet to switch to a BIS-controlled regime. This led to malpractices in the unorganized sector. That has prompted the government to make BIS marking compulsory for all sales done after a year.
BIS marking would ensure you a price equal to the gold in your ornaments, not its antique value.
Is it time for distress sale?
The deadline for switching over to BIS-certified gold ornaments is a year away. So, in any case, you do not have to rush to your neighbourhood jeweller to sell off your ornaments even if they do not carry BIS hallmark.
The gold merchants always check for the purity of gold when you take them for sale, irrespective of BIS marking. The jewellers determine the price of the gold by checking its quality. Whatever said and done, gold always commands a decent market price. So you can keep your inheritance with you unless you are hard-pressed for cash.
You can get any piece of gold certified in a centre recognized by the Bureau of Indian Standards. You will get it branded either 14 karat, 18 karat or 22 karat according to its quality.
The purity of gold can also be determined by X-ray fluorescence (XFR) analysis. Almost all jewelleries have these analysers. The analysis can tell you the amount of gold and copper present in the ornaments you have. Bear in mind, these tests do not yield cent per cent accuracy. You will be given a picture about your asset though.
If you take the result to a BIS-certified hallmarking centre, they will brand your ornament accordingly. You might have to spent four or five yours of your time for the entire process.