The Tanishq showroom on Fraser Road. Picture by Jai Prakash

The sudden closure of Tanishq’s Golden Harvest scheme and Swarna Nidhi has left investors in a dilemma. The customers can avail the jewellery or cash back from July 18.

Umesh Tekriwal, manager, Tanishq, Fraser Road branch, said: “Tanishq will not pay an extra month’s worth of cash or jewellery under the 11+1 scheme. A customer can avail 75 per cent of a monthly deposit from the company, if he/she opts for jewellery and half-a-month’s deposit if one opts for cash.” The Fraser Road branch has 4,200 Golden Harvest Scheme accounts.

For example, if one has been depositing Rs 2000 for 7 months and now wants to buy jewellery, he or she would get (Rs 2,000 x 7= Rs 14,000) + (Rs 2000x75 %) = Rs 15,500 worth of ornaments. If the customer wants cash back, he/she would be paid (Rs 2,000 x 7= Rs 14,000) + (Rs 2000 x 50%) = Rs 15,000. The money would be paid in cash.

Mala Jha, an entrepreneur, who has a Golden Harvest scheme account at the Fraser Road branch, said: “I am in a dilemma. There were only four instalments left. After three months, it would have converted into a good amount from which I could have purchased a necklace I had thought of. But now, I have to buy lightweight jewellery.” The move by Tanishq was necessitated by the new Companies Rules, 2014, which termed these as public-deposit schemes. The act limits the returns that companies offer deposit holders to 12 per cent and caps the total amount of deposits to 25 per cent of their net worth.

Tanishq has been operating two gold deposit schemes — Golden Harvest and Swarna Nidhi — for many years. The Golden Harvest scheme allowed customers to save Rs 500 every month for a period of 12 months or 18 months and buy gold jewellery worth the corpus at maturity. Under Swarna Nidhi scheme, a customer had to pay equated sums for 11 months, after which the company contributed a month’s worth of deposit. The customer could buy gold worth 12 months of deposits.

On the 12th/18th month, Tanishq added a special bonus that worked as a return on the investment over and above the planned purchase of jewellery. If customer deposited Rs 2,000 every month under the 12-month option, at the end of 11 months, he/she would have accumulated Rs 22,000 and the company would deposit the last instalment of Rs 2,000 taking the total to Rs 24,000. Like Mala, others, too would have to get over the thought of buying gold and opt for lightweight jewellery.

Anuja Pathak, a teacher at a private school said she would opt for the cashback on her account in a Sheikhpura store. “The sudden closure of the scheme has made me restless. Since the amount after the 7-month-deposit is fairly good, I will opt for cash,” said Anuja.

The Sheikhpura store has more than 2,000 Golden Harvest accounts.