Booking of cases against two city-based jewellery shop owners by the Central Bureau of Investigation brings to the fore the fact of bullion traders taking loans several times more than the value of the yellow metal with a view to make a killing. All is fine as long as the bullion merchants, who speculate on the future price of the yellow metal in the commodities market, service the debts secured from commercial banks without any problem.
They land in a serious trouble when the business plans go haywire. Their accounts turn non-performing when they are not in a position even to pay interest on loans as the price of the yellow metal turns volatile due to developments at the global level, police sources here say referring to the cases filed against Shantilal and Son Jewellers and Shanti Kalash Jewellers on a complaint from a public sector bank for alleged misappropriation of ₹70.13 crore.
Banks prefer to sanction term loan as also overdraft facility to gold merchants in view of the reputation enjoyed by them in the society without fully understanding their business dealings which take turn for the worse in the wake of the fluctuation in the price of the precious metal, the sources say.
Involvement of the loan sanctioning authorities in the banks could not also be ruled out, they add referring to the two cases wherein the owners had secured loan on the pretext of renovating their shops on the Achari street from the Canara Bank branch(then Syndicate Bank branch) at Dargamitta here.
''We will extend all assistance to the CBI if sought to unravel the conspiracy in full,'' they add referring to the cases filed on complaints from the Stressed Management Branch of the bank.
