Exclusive : Consumer Fighting the Indian Government over alleged Misleading 'Gold Deposit Scheme'

By Vineet Malik | March 11, 2021 | London, England

'Gold Deposit Scheme' introduced by the Indian Government under High Court Scanner

People in India look for ways and means to supplement their income in order to beat inflation and as a first preference, choose to transact with the Government instead of a private entity to rule out deception.

Manubhai Patel, 66 a resident of Mumbai, in 2010 purchased 1000 grams of swiss gold coins with 999.9 (PPT) Part Per Thousand purity through the ‘Gold Deposit Scheme’ jointly introduced by the Central Government and State Bank of India.

SBI is a Government owned, 43rd largest bank in the world which ranked 221st in the Fortune Global 500 list. The India Government MINT is responsible for production of currency, refining of gold and silver currency and other related services.

As per the GDS scheme, Patel had deposited the gold coins with SBI.

The terms and conditions in the small print stated, “The depositor will have the option of redemption in gold or rupees on maturity.”

Little did Patel know that, his decision to invest money in SBIs GDS scheme would make him run from pillar to post to get his own money back.

Patel was shocked to realize that, he was allegedly conned by SBI and the IG MINT pertaining to difference in weight, purity and for being time and again refused to redeem from gold to money in breach of the conditions stipulated in the terms and conditions.

The difference accrued to .05 grams in weight, 0.9 ppt in purity and INR 7,00,000 / £ 7,000 in value.

The State Consumer Disputes Redressal Commission, Maharashtra in 2019 dismissed SBIs appeal by slapping a cost of INR 10,000 / £ 100 to be paid to Patel.

The order stated, “Unnecessary confusion created by the IG MINT was unjust, improper and uncalled for in the facts and circumstances of the case.”

The Delhi High Court in February last year issued a notice to SBI and the IG MINT with directions to file their response vide a civil writ petition filed by Patel.

Patel says, “SBI in collusion with the India Government MINT is involved in fraudulent practice and running a scam to deceive people under the Gold Deposit Scheme.”

SBI has been shrouded in controversies in the recent years.

In, 2014, It was alleged that, SBI had sanctioned a loan of INR 100 Crores / £ 10 Million to Adani, an Industrialist known as an ardent supporter of Narendra Modi, Prime Minister of India.

SBI was later surrounded under charges of crony capitalism.

SBIs net profit in December quarter fell 7 per cent annually in contrast to the same quarter last year as it is mired in bad debts for technically waving off loans to the tune of more than multi billion in value.

As a practice, when such debts are written off, the bank balance and profit of the bank gets eroded.

With such emerging instances, all this has shaken the confidence of people in the Indian Government and banking system.

Shaktikanta Das, Chairman and Governor - Reserve Bank of India and Dinesh Kumar Khara, Chairman - SBI did not respond to a request to seek their comments.

Tripti Patra Ghosh, Chairman - IG MINT responded by saying, “I have no knowledge about the case. We will respond only when we know about the same.”

Patel’s matter will be next heard in the High Court on May 20, 2021.