About six years ago, two Englishmen from Kiln, a member of the famed Lloyds reinsurance market in London, undertook an unusual journey in India. They joined a group of unassuming men in the crowded Mumbai Central railway station to board a sleeper coach in the evening train to Surat. Each carried a handful of uncut, rough diamonds tucked into concealed pockets in shirts and jackets. The next day, they took the train back to Mumbai carrying a consignment of polished stones. The guests were flummoxed by what they saw. Their companions, collectively carrying. 50-100 crore worth cargo, whiled away the time, chatting and playing cards, before taking the public transport to factories where trained craftsmen turned the roughs into more sparkling stones with the right colour and carat. No questions were asked. No armed guards escorted them. The men from Lloyds were trying to figure out the reinsurance risk of such consignments. “They wanted a feel of the operations. They couldn’t believe what they saw, but soon sensed that was the way business happens here.
For generations, men, many from Gujarat’s Mehsana district, have been ‘Angadias’ — unofficial, trusted couriers who ferry diamonds, jewellery and cash. Last week, when sleuths from the income-tax department, which for months had been probing a money laundering racket, confiscated the cargo of Angadias, there was panic in the diamond hub. An email from a Lloyds syndicate member enquired whether this was a one-off event or the very business was under threat? The fear dispelled within days after the tax office released most of the cargo.
But few outside the club of diamantaires know that what may have been a clincher for the trade and the ancient profession of Angadias is a sheaf of yellowing papers that outlined, 25 years ago, peculiar ways of the trade. At that point, a group comprising the then income-tax commissioners of Bombay, commerce ministry officials, senior chartered accountants and members of the trade had jointly agreed to certain rules of the game. The effort was aimed at explaining tax officials the intricacies of the trade and making life simpler for traders and couriers. The Angadias carry with them pieces of papers, better known as ‘jungad’ slips in trade parlance. These slips are kachcha delivery challans that are either handwritten or computer printouts. In March 1985, the guidelines framed by the group laid down that jungad slips would be accepted as “proof of ownership” of the goods if the details given in the slips tally with the entries made in outward registers of the owners of the goods “as well as the persons in whose custody the diamonds are found”. At that point, tax authorities were explained that there were times when the entire packet of diamonds could not be sold as a whole and the customer would pick some stones while the remaining are returned to the traders.
These transactions can be insured however “only specialised reinsurance companies understand the risk,” said KK Aggarwal, executive vice president, Iffco Tokio General Insurance, one of the few firms that meet insurance requirements of Angadias as part of a package cover called jewellers’ block policy. The Policy covers losses in all transits during the year up to the limit specified in the policy. “In fact, train journeys are considered safer going by experience… The key parameters in the evaluation are the standing of the customer, past experience, value exposure for a single journey, annual turnover, distance travelled, mode of journey and other precautions taken,” said Easwara Narayan, chief operating officer, Future Generali India Insurance Co, another firm (besides state-owned insurers) that sells such protection. Jewellers’ block business, he feels, would be in the region of Rs 60-70 crore in Mumbai and over Rs 100 crore in the entire country.
Source :The Economic Times.
Date : 10/07/2013