Editor’s Note
This dispatch from the bullion markets of central India captures a moment of profound economic uncertainty. While the shops remain crowded, the activity is not driven by commerce but by anxiety—as customers, caught between high prices and volatile rates, navigate a tense standoff. The scene is a stark indicator of how macroeconomic pressures translate into frozen local markets and personal hesitation.
At first glance, the bullion markets of Bhopal and Indore appear bustling as usual. There is a steady stream of customers in the shops, jewelry is being appraised at the counters, and ledger pages are being flipped. However, upon closer inspection, it becomes clear that the atmosphere is filled more with tension and conflict than enthusiasm.
In most shops, neither new ornaments are being sold nor bought. This crowd consists of three types of people:
The first: Those who have come to sell their household gold and silver to take advantage of the increased prices.
The second: Those who have come to pawn their jewelry for current financial needs.
The third: Those whose numbers are the highest, people who have come to reclaim jewelry they pawned years ago.
This is the statement of Sanjay Jatav, a resident of Narsinghgarh. At this time, many people like Sanjay are reaching the bullion markets of Indore and Bhopal. Those who pawned their precious jewelry 10-15 years ago and never returned. They neither paid the interest nor inquired about the principal. When gold and silver prices reached all-time highs, these old customers suddenly remembered their pawned jewelry.
The goldsmiths who had these jewels pawned are in a dilemma because they cannot find such old records. The moneylending rules have a provision that if a person does not pay the interest amount for 7 years, the moneylender can dismantle that item. In such cases, many moneylenders have already melted down these jewels.
Now, because of this, trust between customers and goldsmiths is breaking, and in many places, a situation of dispute is arising. How are the moneylenders dealing with this situation? To find out, Bhaskar spoke to bullion traders in Indore and Bhopal.
Navneet Agrawal, an office bearer of the Bhopal Bullion Association, explains that in Bhopal alone, there are more than 700 traders who have a moneylending license. This work of ours has been going on for generations and is based on trust. But for the past few months, we have been grappling with a strange crisis.
Our old customers, who pawned jewelry 10-15 years ago and never returned, are now suddenly coming and demanding their jewelry back. Agrawal explains, the customer is not worried about their debt today. They feel that even after paying the 15-year principal and interest, they will benefit from the current price of the jewelry. Perhaps they will even get some extra money in hand.
Abhishek Agrawal, owner of a jewelry shop, is worried about his family’s three-generation legacy. Our family has been doing this work for decades, but we have never seen such a situation before. We have been very troubled for the last 2-3 months. 5-10 year old customers are returning. We kept sending them reminders to pay the regular interest, but they never paid attention.
Now when we explain the rules and laws to them, they are not ready to listen. When an old customer returns, the biggest challenge for the trader is to find their account in the 10-15 year old ledgers. Sometimes the record is found, but many times it is almost impossible to find the account in termite-infested or old, deteriorated registers.
A trader shared the case of a customer from the Banjara community in Sehore. “About 9 years ago, he had pawned 400 grams of silver and left. After that, he neither came nor paid interest. Three months ago, he returned and demanded an account. The total amount of principal and interest was less than the current price of silver.
He started demanding the price difference of the increased silver from me. Whereas I had already melted down those ornaments a year ago. Legally, under the Madhya Pradesh Moneylenders Act, after a certain time limit (usually 7 years) and after giving notice to the customer, the trader can dispose of the pawned item.”
The other side of this story also shows the compulsion and desperation of the customers. Sanjay Jatav, who came from Narsinghgarh to the bullion market in Bhopal, narrated his own experience. Jatav said that about 12 years ago, I pawned half a kilo of silver with my traditional goldsmith.
Due to the long time limit, now neither did the goldsmith have the account of that silver, nor did he have the silver.
In Madhya Pradesh, giving loans by pawning gold and silver jewelry (moneylending) is not just a tradition, but a legal process. Strict rules have been made for this under the ‘Madhya Pradesh Moneylenders Act’ and the ‘Madhya Pradesh Debtors Assistance Act’.
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