Gold piles up in banks as market depends on smuggled gold

An NBA official told Republica that Bank of Kathmandu Ltd and Siddhartha Bank Ltd have put on hold their plan to import 50 kg of gold each. Bankers say that gold business is becoming risky. Bhuvan Dahal, CEO of Sanima Bank Ltd, said that their gold sale has fallen unexpectedly these days. “We have been selling gold in small quantities. Only a few gold traders approach us for gold these days,” added Dahal. According to NBA, Citizens Bank and Mega Bank have 40 kg and 49 kg, respectively, in stock. Similarly, Nabil Bank has 50 kg, NMB has 49 kg, and Prime Bank and Sanima Bank have 87 kg and 44 kg, respectively, in stock. “Though our gold sale has fallen, business of gold jewelries is going on as usual in the market,” a CEO of one of the 23 commercial banks authorized to import gold, told Republica. “This proves that the dependency on smuggled gold has increased.” He further said: “Why would one buy gold from us when it is easily available in the grey market at comparatively cheaper rate?” Some jeweler say smuggled gold is cheaper by some Rs 400,000 per kg compared to the gold imported by commercial banks. They also accept that flow of smuggled gold has increased in the market lately. The umbrella association of jewelers has withdrawn its demand to raise gold import quota by 5 kg per day to 20 kg after gold with commercial banks remained unsold. However, Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers Associations, said that they have reduced gold purchase from banks as demand for jewelries have come down drastically. “The demand has fallen to around 15 kg per day against the normal daily demand for 40 kg some months ago,” he added.