We've all read about the hundreds of tonnes of smuggled gold caught by police and customs officials in India. The level of smuggling continues to increase, with ever more clever schemes attempted, but have you ever stopped and wondered what happens to the gold that does get intercepted?
We've put together a little recap of what happens to gold seized from smugglers in India:
If the value of the gold is less than R20 lakh ($33,000), the smuggler can walk free by paying a fine and leaving the gold behind. He or she can also pay the 10% import fee and a penalty, and recover the gold.
If the gold is worth more than R20 lakh, but less than R1 crore, they will be detained and charged, as well as having the gold seized. They are allowed to make bail instead of being detained until trial.
If the value is over R1 crore ($166,000), they are not allowed to bail out of jail.
First, the gold is placed in secured storage at the airport where it was seized. It then goes into storage at the Customs Department as evidence until the trial is completed. This can take up to two years. If the defendant is found innocent, the gold is returned.
Smuggled gold that has been given up is sent to the mint of the Reserve Bank of India, the nation's central bank. The mint is sent advance notice of the amount of gold to expect, and sends a receipt back to Customs when it arrives.
The gold is then smelted and refined to .9995 fineness, and cast into standard size bars.
Once this is done, the gold is returned to the Customs department, which forwards it to the State Bank of India to be auctioned off to registered bidders.
The Bank keeps a 1% service charge, and sends to proceeds to the Customs Dept.
Did You Know?
Before the recent gold import restrictions, consumers in India purchased 2.3 metric tonnes (2300 kg) of gold EVERY DAY? That's the weight of a small elephant!