Amid the fallout of a media report over alleged anomalies in gold kept with the Bangladesh Bank, questions have been raised whether any government agency can carry out an inspection inside the central bank’s vault.
Sources confirmed that Economic Affairs Adviser to the PM Masiur Rahman has sought an explanation from Governor Fazle Kabir over the matter.
On Jul 17, Bangla daily Prothom Alo reported that the Customs Intelligence and Investigation Directorate (CIID) found anomalies while inspecting a random sample of gold from the 936kg kept at the central bank’s vault from January to April last year.
CIID kept gold coins and rings weighing 3.3kg in the vault on Aug 23, 2015, but during the inspection, it found adulteration in the gold, according to the report.
It said that 22-carat gold has been shown as 18 carats in records maintained by the Bangladesh Bank.
The CIID also claimed the gold coins and rings that were deposited to the central bank in 2015 were tested and found to be made of 80% pure gold at that time, but during the inspection they found it to be 40 percent.
The central bank, however, has vehemently rejected the report, saying its findings were faulty because it is impossible to penetrate the vault's security system.
In a media conference the same day, it denied of keeping spurious gold in its vault, describing the whole matter as a ‘clerical mistake’.
According to central bank officials, the CIID approached to them over inspecting the vault in 2016, after the cyber heist of the reserve.
The Bangladesh Bank turned down their request. Following a year of exchanging letter, the CIID, however, was cleared for an inspection in 2017.
A general manager with the central bank told Bangla Tribune that they had allowed CIID officials to enter the vault without any proper clearance from the finance ministry.
The Bangladesh Bank and CIID have been at loggerhead since then, said the official, who asked not to be named.
Amid the fallout, early in 2018, the National Board of Revenue (NBR) forwarded the CIID inspection report to the central bank and sought explanation.
On Jul 11, Bangladesh Bank sent its response to the NBR over the report.
“We have categorically explained each and every query. The only error on Bangladesh Bank’s part was the Bengali-English gaffe in recording (the purity of gold),” central bank General Manager Awlad Hossain Chowdhury told Bangla Tribune.
The purity of the gold kept by the customs detectives was 40 percent, but it was recorded 80 percent due to the similarity between the number 4 in Bangla and 8 in English, according to him.
“There’s no other error and the carat issue has been caused as two different machines were used to calculate it,” said Awlad.
The CIID carried out the inspection between January and April last year while its report was forwarded to the NBR chief on Jan 25, 2018.
A former central bank official described the whole issue as an attempt to malign the Bangladesh Bank’s image.
“It’s clear that the report was meant to question the Bangladesh Bank’s credibility and leave the government in a tight spot,” M Mahfuzur Rahman, a former executive director of Bangladesh Bank.
On Monday, the central bank opened an inquiry.
Upon instructions from high-ups in the government, Governor Fazle Kabir formed a six-member panel and ordered it to file a report within two months.
Finance Minister AMA Muhith, however, said he finds the allegation of gold adulteration useless.
Speaking to the media on Tuesday he said only 3kg gold out of the 963kg stored in the Bangladesh Bank vault was adulterated.
“The central bank doesn’t have any problem and that the allegation of gold adulteration in its vault is useless,” said the minister.