Dharan jewellers making residents insecure

Sunsari, August 21

The tendency among gold entrepreneurs not to pay the loan against gold worth millions belonging to the public, which they have kept in the banks as collateral has increased fear that the public might lose their precious metal.

Commoners are feeling insecure about their assets after anomalies worth millions came to light at Nepal Bank Dharan branch office. A similar scam had taken place at Dharan branch office of Century Commercial Bank sometime back. Gold traders deposit gold items received as collateral from the public in the bank and take loan against gold and do not repay the loan. This is sure to hit gold owners.

For cash collection and collateral transaction, approval from Nepal Rastra Bank is a must. However, mushrooming gold and jewellery shops’ major business is to keep people’s gold as collateral at exorbitant interest rate. It was found that gold traders took loans exceeding the real value of the collateral by many times, by keeping people’s gold in the bank.

A source said that gold entrepreneurs are taking millions as loan and exceeding the real value of the collateral in nexus with bank staffers. Central offices of the banks have directed their branch offices to ask gold traders to deposit money issued as loan exceeding the real value of the collateral and the dues from the banks in collaboration with Central Bureau of Investigation .

Subash Rai of Dharan said the practice of visiting gold traders instead of going to the banks for gold loan had created the problem. Rai complained that he had visited the gold shop to receive the gold kept as collateral, but he was returned saying that the shop’s proprietor had been arrested and his gold would be returned later.

Bankers say this situation has arisen due to people’s preference for insecure transaction. Requesting anonymity, a manager of a bank said, “People have become insecure because they do not visit the bank to enjoy the gold loan facility at the bank”.

Central Bureau of Investigation has arrested 11 people over gold loan in Dharan for investigation.

Gold traders issue loan at an interest rate of 24 per cent from the public and deposit the public’s precious metals at the bank at an interest rate of 15/16 per cent. They are making the interest gap of eight per cent a source of their major profit. Despite the profit margin of up to eight per cent, gold traders are not paying the loan to the bank. CIB is looking into where gold entrepreneurs have invested the loan money.

CIB team Chief DSP Kamal Thapa, who is carrying out the investigation in Dharan, said that it would take more time to get to the depth to bring out the facts relating to the incident. DSP Thapa said that of the 31 involved in the gold loan racket, 11 were held while search was on to nab the remaining 20.