Page 23 - Bullion World Volume 5 Issue 08 August 2025

Bullion World | Volume 5 | Issue 08 | August 2025
B ullion W orld | V olume 5 | I ssue 08 | A ugust 2025
A Frightening Compliance Gap Resistance to Change - A Dangerous Mindset
Despite these serious implications, compliance across A major issue, according to Mr Surendra Mehta, is
the jewellery industry remains shockingly low. Out of the fear among jewellers of losing customers if they
nearly three lakh jewellers and bullion dealers in India, insist on KYC. Many top-tier jewellers still refuse to ask
Mr Surendra Mehta revealed that only 47 had directly for Aadhaar and worry that customers will take their
registered with the Financial Intelligence Unit (FIU) as business elsewhere.
of late 2023.
To address this, IBJA partnered with consultancy
“This is an alarming figure,” he remarked. “Even firm Finmet to offer a third-party compliance
though those with turnover below ₹500 crore can model - allowing jewellers to report through an
comply through associations like IBJA - which is independent channel. Still, the adoption rate has been
already registered with the FIU - jewellers are still underwhelming.
reluctant to even begin the process.”
“We’ve conducted more than 30 seminars and
What the Law Requires - and What the Industry webinars,” Mr Surendra Mehta pointed out, “but the
Misses level of active interest from jewellers remains minimal.”

Under PMLA, the requirements are clear: The Consequences of Inaction
According to Mr Surendra Mehta, continued resistance
• Above ₹50,000 in cash: Full KYC could result in harsh regulatory crackdowns. “One fine
(Aadhaar + address proof) is mandatory. day, the government will act - and then it may be too
late,” he warned.
• Above ₹2 lakh: PAN must be obtained.
He fears that unless voluntary compliance increases,
• Above ₹10 lakh in monthly aggregate: the government might eventually ban cash transactions
The transaction must be reported to the FIU in jewellery altogether - similar to the restrictions
imposed on NBFCs and banks.
Yet, Mr Surendra Mehta noted that most jewellers
continue to ignore these mandates, often mistaking An Urgent Wake-Up Call
the ₹2 lakh income tax cash limit as applicable under In his closing message to Bullion World, Mr Surendra
PMLA as well. Mehta urged the industry to act now. “This is not a
matter of preference. It’s the law,” he said. “Comply
“You need to get Aadhaar, not just PAN,” he said. now or pay the price later.”
“If your neighbour is not following the law and you
want to join him in jail, that is your personal

Everyday Transactions that Can Turn Illegal Additional Insights on PMLA
Several routine practices within the jewellery trade fall Compliance and Jewellery
into grey or illegal areas under PMLA. For instance: Industry Reform
• Jewellery Exchanges: If a customer exchanges old 1. Digital record-keeping improves
jewellery worth ₹6 lakh for new jewellery without transparency and curbs illicit trade in
paying cash, it’s still reportable. If not documented the jewellery supply chain.
properly, it’s technically money laundering. 2. New technologies like mobile KYC
• Family Transactions: If different family members and blockchain are helping jewellers
conduct separate transactions that together comply more efficiently.
cross ₹10 lakh in a month, it qualifies as a single 3. Many jewellers need better
reportable transaction.
training and awareness on PMLA
requirements.
“These are loopholes that authorities are watching 4. Though compliance may slow
closely,” said Mr Surendra Mehta.
transactions initially, it builds long-
term customer trust.

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