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New Delhi: In a dramatic twist in the ongoing PNB-Nirav Modi scam, it has now been revealed that the Indian Bullion and Jewellers Association (IBJA) had forewarned the Reserve Bank of India governor of the time, Raghuram Rajan, of an epic swindle as far back as July 26, 2014. Under the scanner is also then finance minister P. Chidambaram’s controversial decision on May 21, 2014, five days before the UPA government officially demitted office, to allow 13 traders — Nirav Modi and Mehul Choksi groups — to import gold and sell it.

Mohit Kamboj, president of the IBJA at the time, said that “finance minister P. Chidambaram ostensibly brought the 20:80 gold policy to control the burgeoning current account deficit which had shot into the stratosphere due to rampant gold import… But, in reality, this was done to benefit a handful of cronies going under the nomenclature of Star Trading Houses and Premier Trading Houses (which included both Nirav Modi and Mehul Choksi groups) since scarce gold was sold at a mark up of approximately 10 to 15 per cent per kg. We made several representations not just to the RBI governor but also to finance ministry mandarins, including P. Chidambaram… It was only in July 2014, after the National Democratic Alliance government had come to power, that cognisance was taken.”

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An exclusive media report about former Reserve Bank of India (RBI) governor Raghuram Rajan and an impending problem in the gold industry throws interesting questions on the role of the UPA government and the approach of the regulator to the issue in the backdrop of the Rs 12,700 crore Punjab National Bank (PNB) fraud case.

The report in Moneycontrol mentions a letter written by the India Bullion and Jewellers Association (IBJA) on 26 July, 2014. The industry lobby accused the then Congress-led UPA government of 'deliberately yielding to the cronies' by changing the gold policy days before the government was demitting office, the report says. The accusation was primarily based on a decision taken by the government ‘on May 21, 2014, five days before the UPA government officially demitted office, allowed 13 'star trading houses (STH)' and 'premier trading houses (PTH)’ including Choksi-led Gitanjali Gems to import gold and sell about 80 percent of their total bullion shipment in local markets under the so-called 80:20 scheme.’

 

http://www.firstpost.com/india/pnb-scam-did-upa-cook-up-8020-scheme-to-aid-the-choksis-and-nirav-modis-is-raghuram-rajan-guilty-of-ignoring-early-warning-4381699.html

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Exclusive | PNB scam: Check before it’s too late, bullion body had warned Raghuram Rajan about 80:20 gold scheme

India Bullion and Jewellers Association had accused the previous UPA government of “deliberately yielding to the cronies” by changing the gold policy days before demitting office

Gaurav Choudhury@gauravchoudhury
   
 

 

The jewellery industry had warned of an impending scandal in India’s bullion industry caused by former Finance Minister P Chidambaram’s controversial decision to allow 13 traders to import gold four years before the diamond merchant Nirav Modi and his uncle Mehul Choksi fled the country defrauding banks worth an estimated Rs 12,000 crore.

In a letter to the then Reserve Bank of India (RBI) governor Raghuram Rajan on July 26, 2014, the India Bullion and Jewellers Association (IBJA) had accused the previous UPA government of “deliberately yielding to the cronies” by changing the gold policy days before demitting office.

A decision was taken on May 21, 2014, five days before the UPA government officially demitted office, allowed 13 'star trading houses (STH)' and 'premier trading houses (PTH)’ including Choksi-led Gitanjali Gems to import gold and sell about 80 percent of their total bullion shipment in local markets under the so-called 80:20 scheme.

https://www.moneycontrol.com/news/business/economy/exclusive-pnb-scam-check-before-its-too-late-bullion-body-had-warned-raghuram-rajan-about-8020-gold-scheme-2522913.html

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