Jewellers’ body seeks abolition of gold ETFs

“We strongly recommend abolishing gold ETF investment in the country which is completely idle investment ... All India Gems and Jewellery Trade Federation also recommends introducing 25% commodity transaction tax  on ETFs,” its chairman Bachhraj Bamalwa said

Kolkata: National jewellers’ body, All India Gems and Jewellery Trade Federation (GJF), has suggested abolition of gold exchange traded funds (ETFs) to prevent the shift from buying the precious metal from jewellers, reports PTI.

“We strongly recommend abolishing gold ETF investment in the country which is completely idle investment ... GJF also recommends introducing 25% commodity transaction tax (CTT) on ETFs,” its chairman Bachhraj Bamalwa said here today.

Gold ETFs are exchange traded funds of gold and a person can hold units of gold in demat form in more cost effective manner. The funds also offer liquidity on stock exchanges.

Previously investment in gold was done in the form of jewellery; Mr Bamalwa said adding jewellers have lost business by 30%-50% since October 2011.

According to GJF, 25%-30% of gold imports are being diverted to gold ETF investment. In 2011 gold imports were pegged at 969 tonnes.

GJF in its budget suggestion asked for increasing the limit of gold buying to Rs25 lakh from the present Rs5 lakh which would require furnishing of the PAN card.

The federation, however, expressed satisfaction on the government’s clarification on imposition of excise duty on branded jewellery.

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Edelweiss Tokio Life Insurance launches non-linked Cashflow Protection

"Cashflow Protection is a plan that caters to three important milestones, which include wealth accumulation, planning for retirement, and building and creating a legacy for children and grandchildren:” Edelweiss Tokio Life Insurance.

Private insurer Edelweiss Tokio Life Insurance launched Cashflow Protection, a non-linked, participating endowment assurance money back participating plan that enables one to plan for important stages or milestones in life. The plan aims to cover the need of wealth accumulation, retirement and legacy transfer, the company said in a release.

The entry age of Cashflow Protection is five years with an option of selecting the maturity age as 85, 90, 95 or 100 years, a protection for the whole life.

"We are indeed delighted to offer Cashflow Protection, a plan that caters to three important milestones, which include wealth accumulation, planning for retirement, and building and creating a legacy for children and grandchildren," Edelweiss Tokio Life Insurance CEO Deepak Mittal said.

The minimum basic sum assured for the plan is Rs75,000 with no upper limit and premiums are based on the sum assured, premium paying term, entry age and gender of the life assured.

Besides, the plan also offers sharing of profits enabling one to earn higher returns through additional cash bonus, limited premium paying periods, discounts for higher sum assured and special discounts available for female lives and loans against the policy to meet unforeseen needs.

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RBI: Lenders' use of credit information needs improvement

“Credit risk is, by far, the largest risk faced by banks:” RBI

Lenders' use of credit information data needs improvement, particularly with regard to corporates, the Reserve Bank of India (RBI) has said.

“(Credit institutions) need to use the credit information data in a more wholesome manner. Our impression is that the data on corporates is not being used as much as for retail exposures. This needs improvement," RBI deputy governor Anand Sinha said at meet. Addressing the fourth Annual Credit Information Conference, he said “credit risk is, by far, the largest risk faced by banks”.

Anand Sinha further said that based on stakeholders' feedback, it is observed that Credit Information Companies (CICs), which enable sharing of credit information among lenders, face issues relating to data accuracy, timeliness and completeness.

"Credit institutions in India need to substantially improve the quality and completeness of data as well as timeliness while furnishing credit information to the CICs," he said.

Credit bureaux/CICs are an institutional arrangement to deal with moral hazard and adverse selection problems on account of information asymmetry, the RBI official said.

"Shared information allows better assessment of risk profiles of potential borrowers (i.e. deals with adverse selection) and creates incentive for borrowers to pay on time by limiting borrowers' ability to access credit from other lenders (i.e. deals with moral hazard)," he added.

He also said credit institutions would need to be more proactive in cases of credit denials and unfailingly ensure that their proposed borrowers are supplied with a copy of their credit reports.

"In fact, one of the most effective mechanisms for maintaining the quality and accuracy of information is to notify borrowers when their credit applications are refused," he said.

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