The central bank has not auctioned its seized gold for the last 10 years. During this time, the amount of gold stored in the bank raised repeatedly.
The central bank that held its last auction of gold in July 2008 has 963 kilograms of gold in its volt.
The demand for gold in Bangladesh is 30-40 tonnes a year. Since there is no gold mine in the country, traders have to import gold to meet the demand of such a huge quantity of the yellow metal. But the reality is gold is not imported legally. As a result the demand is met by smuggled gold. Traders are not inclined to import gold since it is easier to bring it illegally. They are also not interested to buy the gold deposited to Bangladesh Bank.
Sources said during auctions traders offered lower price than the actual price of gold. They offered less than Tk3,000 for gold which price is actually Tk 40,000, which is why the central bank has not been holding any auction for the last nine and a half years.
The central bank has been repeatedly urged for regularly auctioning its seized gold to ensure supply of the precious metal on the market.
In this regard, former Bangladesh Bank spokesperson M Mahfuzur Rahman said: “Traders can profit from the smuggled gold. Maybe that is why they offered very low prices for the gold deposited to Bangladesh Bank during the auction.”
Referring to BB’s last gold auction he said, “During the auction in 2008, the traders said there is no demand for gold in the country.”
He also said: “Gold business is transparent all over the world but it is not transparent in Bangladesh. It happens only in Bangladesh that prices of gold rise after mixing something else with it.”
Contacted over the BB official’s allegation that gold traders offer fewer prices at auction, Bangladesh Jewelers Association’s president Gangancharan Malak categorically denied the allegation.
He rather claimed the opposite, saying: “The gold traders purchase the gold citing competitive prices. At present, there is huge demand of gold in the local market. If the Bangladesh Bank auctions its seized gold, we will show huge response.”
On May 18, 2017, the Customs Intelligence and Investigation Directorate sent a letter to the central bank, asking it to regularly auction gold seized in drives and ease the process of importing the precious metal.
Customs Intelligence and Investigation Directorate (CIID) which prepared a report based on inspection at the vault in January-April 2017 and submitted it in January 2018, sent a letter to the Bangladesh Bank seeking necessary action.
According to the report, on 23 August 2015, warehouse official of the customs Harunur Rashid handed over a gold disc and a ring weighing 3.3 kg to the central bank authorities.
The Bangladesh Bank authorities, after examination of the gold by a goldsmith, certified it as 19.2-carat genuine gold before putting it into its vault. That means the metal contained 80 per cent pure gold.
When the team of investigators reexamined the gold disc in January this year, it was found that the metal contained only 46.66 per cent gold and it was graded as 11.2-carat gold, said the report. The ring had 15.12 per cent gold which is graded as 3.63-carat gold.
“The disc and ring contain no gold at all. These are made with alloy of other metals,” read the report. The government has lost Tk 11.8 million as a result of this adulteration alone.
Earlier on Tuesday, Bangladesh Bank at a press briefing denied the allegation. “There is no irregularity found in the gold,” said central bank executive director Rabiul Hassan, and general manager Awlad Hossain Chowdhury.