Fake Gold loan fraud There was recent news of conspiracy and fraud involving 3 neighbouring branches of BOI, Velim, Chinchinim and Cuncolim and amount is around 3 crores. Fortunately it has been detected and some arrests have been made. Remember it is depositors money that is at stake, unless recovered .It s learnt that the same valuer is appointed in 9 branches of BOI., this is strange and his full involvement will surface, when inquiry is ordered at other 6 branches. Measure of his credentials of appointment are not vigorous, as many are not willing to waste their profitable time and it is part time job ,not mandated to be on site every day. Some banks have in house valuer at all times, and others disburse gold loans only from designated branches. The fraudulent borrowers are not from immediate vicinity and at least one of the fraudster is featuring in two branches. The modus operandi it is rumoured that the borrower represented the valuer as dealer and enticed him to be a willing conspirator and without his active connivance such massive fraud would not have been perparated. Fake gold is not available of the self and it is possible that that dealer was also facilitating the manufacture of fake gold. The banks have a signed bond with the valuer, paying him either fixed amount per transaction or percentage of the loan sanctioned .The bond is not available for scrutiny for public or depositor to appreciate his absolute liability. At least 19 of 31 frauds are related to one branch. If it was one or two cases of misjudgment, it was understandable. The appointment is done by Zonal Office. The officers unaware of the process of checking rely entirely on the expert advice of their valuer and rightly so .In case of doubt the Bank may refer the verification of authenticity to another of their valuer on the role Nevertheless the Bank officers could casually satisfy themselves as responsibility when the amount of loan is large , whether he lives in the vicinity, has bank account, why does he not seek it at the branch closest to him, his credentials, profession, purpose of loan source of gold ornaments. source of payment of installments, whether he has loan in any other branch at least of their own ,cross check with other local branches and adopt layman`s visible and colour test. What ever test and the process done by the valuer is in their presence ? He determines the gross and net weight, purity after deduction of making charges, wastage, stones and etc and on his certification ,loan is sanctioned for a year, after paying, stamp duty, processing fee. No loan is entertained other than on gold jewelry and loans beyond 5 lakhs are split between two members, Besides security of ornaments loan is restricted as a hedge on certain weight and not on market value
In India gold attachment is emotional and tradition For normal person checking the purity is not an easy task and mostly depends on good faith and trust Purity of gold is expressed in Karats or in percentage. I karat is one part gold and 23 parts other metals or Karat, divided by 24 X1oo= is 100% pure .24 karats is pure gold, soft and not easy o convert into ornaments It is also denoted as 3 digit number e.g 24 Karat 999 or 99.9% pure as deviation of .5% is allowed. 23K 958, 22K917,20K 833, 18K (750) ,14 K 585, 10K 417 and is not gold Hall mark jewelry has logo(BIS), year A (2000) etc, purity, logo of jeweler and is reliable, unless it is faked and old ornaments or before hall marking It is costly and takes time, 20KP mark eg .where P is plumb line and purity 20 K Not every item is hall marked and common people do not visit such outlet Gold is mixed with other metals like silver, copper,nickel,,palladium to give hardness,shine, colour,etc.Yellow gold (80 gold+13 silver+7copper) Red gold (80gold+3silver+17 copper) , Grey/White gold 80 gold+ palladium +nickel) Accurate purity is possible, but equipment/machine are costly and need specific training. Two important methods in use iare destructive and non destructive X ray fluorescent Some other simple test may help to some extent in checking the purity of gold A…Visual metod about colour, counterfeiting need some experience B discoloration after constant use, of part in contact C…Bite like gold medal makes a deeper dent, but with lead content it can mislead D..magnet test A strong magnet is needed. Gold is non magnetic, but mixing of non magnetic substances make it difficult to guess D..Density is best, but measuring accurately weight and also volume in ml is needed. Density=weight/volume. 24K (19.3)22K (17.7 17.8) 18K (15.2 15.9) 14 K (12.9 13) etc Hollow ornaments will give different density and will not be reliable and also with precious stones, unless removed E …Unglazed ceramic vessel, leaves black streak when dragged or gold streak if pure .NITRIC Acid is more reliable. But is dangerous to handle Gold is scratched on touch stone, acid resistant,black basalt or slate and nitric acid is put. If the colour is green it has base metal etc, gold reaction has gold AND BRASS PLATED ,milky colour has gold with silver and no reaction means pure gold The stone has to be thoroughly cleaned and acid concentration is different for24 K, 23 K, 22K etc and kit is available and stainless steel container is must If gold is combined with tungsten then it is difficult to conclude Gold being heavy always sinks to the bottom and does not get oxidized or rust on use The gold can be dissolved in Aqua Regia, Nitric acid:Hcl 1;3, then precipated with zinc,sodium metabisulphite and urea,, filtered and heated with borax to get exact gold content, but it is destructive Nelson Lopes Chinchinim
