Bangladesh Bank Official Disputes Customs Report about Gold Tampering

A Bangladesh Central Bank official on Tuesday challenged a claim by customs officials that confiscated gold deposited in its vault had been tampered with to lower its value.

The Customs Intelligence and Investigation Directorate of the National Board of Revenue (NBR) sent a letter to the bank alleging that confiscated gold ornaments and wheels stored in the vault had been changed, creating a loss of more than 30 million taka (U.S. $355,000).

“There is no scope for pilfering gold from the vault of the central bank as it has ensured foolproof security,” bank Executive Director S.M. Rabiul Hassan said at a Tuesday news conference where he challenged the veracity of the customs report.

NBR officials said the report was based on a study of 963 kg (2,123 pounds) of gold preserved in the vault.

“An eight-member team conducted the investigation for over a year. We have conducted the inspection in the presence of the officials of the Bangladesh Bank,” customs Director General Shahidul Islam told reporters.

Customs reported it had stored 3.3 kg (7 pounds) of gold in the vault on Aug. 23, 2015. An inspection revealed the gold had been adulterated with other metals, causing a loss of more than 11.1 million taka ($131,500).

In addition, 22-carat gold stored by customs later registered as lower-quality 18-carat gold, creating a loss of more than 19 million taka ($225,000), the report claimed.

Bank General Manager Awlad Hossain refuted the report’s findings.

“It is nothing but a clerical mistake. The purity of the gold measured by the customs detectives was 40 percent, but it was recorded as 80 percent due to the similarity between the number 4 in Bangla and 8 in English,” he said.

“The NBR used a different machine and we doubt the credibility of NBR machine’s reading.”

Inquiry sought

A former central bank deputy general called for an outside inquiry.

“The explanation of the Bangladesh Bank is neither satisfactory nor acceptable. It cannot be a mistake of a clerk as gold is deposited in the Bangladesh Bank in presence of its high officials,” Khandker Ibrahim Khaled said. “The officials take inventory when the gold is deposited and officials on both sides sign for it.

“External agencies should be assigned to conduct the inquiry,” he said.

Economist Anu Muhammad said Bangladeshis were losing confidence in the central bank in light of its recent history, including an electronic theft of $81 million in February 2016.

Following the heist, the central bank said thieves had hacked its cyber system and placed 35 payment orders with the New York Federal Reserve via an exclusive SWIFT code, which is used for international wire transfers between banks. Five orders involving U.S. $101 million were processed automatically.

Of that amount, U.S. $81 million went to five accounts at an RCBC bank branch in the Philippines, while the remaining $20 million went to a bank account in Sri Lanka held by a local NGO. The Sri Lankan Bank returned the $20 million.

“An investigation report over the theft was not published and in fact no action was taken against anybody,” Muhammad said, demanding a proper investigation and immediate release of the reports to restore confidence in the bank.