Did the Modi government clandestinely transfer over 200 tonnes of gold overseas, from the Reserve Bank of India’s gold reserves? The issue of the nation’s bullion holdings has come to the fore on the basis of ‘reports’ which appeared in certain publications, which were then shared on social media and messaging platforms.

The official handle of the Congress party tweeted a link to an article by the pro-party publication National Herald, titled ‘Did the Modi govt secretly transport 200 tonnes of RBI’s gold to Switzerland in 2014?’ The article appeared online on May 2.

Did the Modi govt secretly transport 200 tonnes of RBI’s gold to Switzerland in 2014?

“What did the government get in return for exchanging the gold? Why is the information about the transaction not available in public domain?”https://t.co/tvlefhPNke — Congress (@INCIndia) May 2, 2019

This ‘news’ has been circulating on WhatsApp. It had appeared in an obscure Hindi publication, Dainik Dopahar (image posted below). This report says, “Modi government, which waxes eloquent on honesty and transparency, secretly transported 268 tonnes of gold outside the country. This happened nearly 4 years back, and has been revealed through a RTI which could compound the difficulties of the Modi government (translated).”

The report further says that an investigative journalist named Navneet Chaturvedi had filed a RTI and claimed that the government transferred 268 tonnes of gold abroad in July 2014, for which he has the relevant documents. It states, “He claims that the gold was with the RBI in June 2011, but in 2015 this was revealed and it was found that 268 tonnes of gold was missing from the RBI balance sheet. However, the Modi government kept such a huge matter a secret…(translation). According to his Facebook profile, Chaturvedi describes himself as an ‘independent investigative journalist’. His profile also says that he will be contesting the South Delhi Lok Sabha seat.

The same has been printed as a headline in a Hindi publication Indore Samachar, with the headline “200 tonnes of RBI’s gold secretly sent abroad” (translation).

On social media, the same has been posted in the form of a meme by a page Journalist Punya Prasun Bajpai. The post has been shared over 17000 times.

How true is the claim?

Is there any truth to the claim that a huge volume of gold was shifted outside the country, and that too in a covert manner after the Modi government came to power in 2014?

Alt News perused the annual reports of the central bank for successive years- 2011-12, 2012-13 and 2013-14, and compared it with the annual reports of the RBI from 2014-15 to 2017-18, the latest report. The total gold stock of the Reserve Bank of India has remained consistent throughout, and has in fact increased marginally in 2017-18.

Let us take 2013-14, the final year of the UPA-II regime. The RBI annual report 2013-14 states that the total volume of gold held by the Central bank is 557.75 tonnes, “of which 292.26 metric tonnes are held as an asset of the Issue Department and the balance 265.49 metric tonnes is treated as part of the other assets of the banking department.” It may be noted that ‘Gold held in Issue Department’ refers to gold which is held by the RBI within the country as a cover for the total currency notes issued, whereas ‘Gold held in Banking Department’ is gold which is held overseas.

The annual report for 2017-18 states, “The Reserve Bank holds 566.23 metric tonnes of gold, of which

292.30 metric tonnes are held as backing for Notes issued as on June 30, 2018 (Table XII.6). The value of gold held as backing for notes issued increased by 7.70 per cent from `690.30 billion as on June 30, 2017 to `743.49 billion as on June 30, 2018, primarily on account of depreciation of Rupee vis-à-vis USD.”

No, 200 tonnes of gold was not shifted abroad

The comparison of the numbers in the two reports viz. 2013-14 and 2017-18, clearly show that there has been not a decline in the volume of gold held, but in fact a modest increase of 8.48 tonnes, from 557.75 tonnes in 2013-14 to 566.23 tonnes in 2017-18. Moreover, the volume of gold held in the banking department has remained steady- it was 265.49 tonnes in 2013-14, which rose to 273.93 in 2017-18. In other words, there has been no covert transfer of over 200 tonnes of gold abroad during the Modi government’s rule, as claimed.

It is worthwhile to note that this transfer of gold to the Bank of England and the Bank for International Settlements (BIS) was effected before 2014 i.e. before the Modi government came to power. A report of The Hindu dated February 28, 2012 had stated “The Reserve Bank held 557.75 tonnes of gold as on September 30, 2011. Of these, 265.49 tonnes are held abroad in deposits/safe custody with the Bank of England and the Bank for International Settlements.” The issue had also been raised earlier in 2012, when a PIL was filed in the Bombay High Court over the RBI’s move to shift 265.49 tonnes of gold out of India.

Improper scrutiny of balance sheet

Alt News studied the balance sheets of the RBI presented in the National Herald article, which have been used by the petitioner in favour of his argument, and are available in the annual reports of the Reserve Bank of India.

The petitioner has claimed that the balance sheet for 2010-11 categorically shows that the gold ‘held outside India’ is nil. He has referred to the ‘Issue Department’ section to show that as of June 30, 2011, all the gold held by the RBI was within the country. Simply put, this is a flawed reading of the balance sheet.

The petitioner has only referred to the Issue Department of the balance sheet. Under this section, only the gold which is within the country is listed. Hence, the gold reserve of the RBI ‘held outside India’ is shown as nil. The gold which is kept outside India is reflected in the Banking Department of the balance sheet. The petitioner, by focusing only on one section of the balance sheet, ended up with a flawed understanding of the management of gold reserves of the RBI.

The petitioner has conflated the gold assets of the Issue Department with the entire gold reserve of the RBI. As pointed out above, the gold assets which are not part of the Issue Department are placed under ‘other assets’ in the balance sheet of the Banking Department. As can be seen below, the gold ‘Held outside India’ section under Issue Department shows a blank, whereas the Banking Department reflects the overseas gold reserve in the ‘Balances held abroad’ section.

RBI rubbishes claim

The Reserve Bank of India meanwhile rubbished these recent ‘reports’, clarifying via a press note that no gold was transferred out of the country in 2014 or after, adding that “it is a normal practice for Central Banks world over, to keep their gold reserves overseas with Central Banks of other countries like the Bank of England for safe custody.”

The claim that the Modi government secretly transported over 200 tonnes of gold overseas from the RBI’s gold reserves is patently false, and premised on erroneous reading of the balance sheet of the central bank.

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