Are silver bars and coins sold in India genuine?
What's the story
The Indian silver market is witnessing a major crisis as counterfeiters are flooding the market with impure silver bars and coins. This comes in the wake of a sharp rise in prices of the precious metal and strong investment demand. The situation has prompted precious metal refiners to call for stricter regulations from the Bureau of Indian Standards (BIS) to protect consumers.
Regulatory push
Refiners demand mandatory hallmarking of silver products
Refiners have demanded mandatory hallmarking of silver products and compulsory licensing for silver refiners from the BIS. James Jose, President of the Precious Metals Refineries Forum, said a large share of silver bars and coins in retail markets are substandard and don't meet the asset-class fineness standard of 999 purity with certified BIS hallmarking. He added that many new silver jewelry items are made from scrap silver without proper refining.
Disparity
Only 286 assaying and hallmarking centers for silver in India
Despite consuming nearly 7,000 tons of silver every year, India has only 286 assaying and hallmarking centers for the metal. This is a stark contrast to gold, which has 1,595 such centers despite its annual consumption being much lower at around 800-850 tons. The Precious Metals Refineries Forum has also flagged the issue of prohibited elements like lead and cadmium from scrap silver entering new jewelry.
Quality improvement
Forum suggests nationwide network of BIS-licensed silver refineries
The forum has suggested that a nationwide network of BIS-licensed silver refineries could solve the problem of prohibited elements in new jewelry. More than half of the silver sold in India is in the form of articles like worship items, lamps, and utensils. The body also noted that offerings of pure silver at temples are often substandard. Hallmarked silver bars from certified refineries could improve quality standards in the market.
Market move
Exchanges planning to launch quality-certified silver bars
Exchanges like MCX, BSE, and NSE are planning to launch quality-certified silver bars on their commodity platforms. Jose said India requires world-class silver refineries to supply asset-class silver bars to these exchanges. Several BIS-licensed gold refineries are already refining silver and are eagerly awaiting the launch of a BIS licensing scheme for this precious metal.