Following news last week of a surge in Chinese retail gold premiums as demand for physical bullion soars amid China capital controls, Reuters reports that the chaos in India has sent people rushing to buy gold, paying as much as a 50 percent premium above official India prices. This renewed surge in demand for physical in India follows reports that India’s top importer of gold, Axis Bank, reportedly suspending the bank accounts of some bullion dealers and jewelers following the arrest of some executives over money laundering.

Last week saw news of reported gold import curbs in China (and looming capital controls) has sent gold premiums in China near three-year highs amid limited supply of the precious metal (as Reuters reports)…

And now, as Reuters reports, concerns are growing in India that import curbs or outright confiscation may be coming…

Axis Bank Ltd, India’s top importer of gold, has suspended the bank accounts of some bullion dealers and jewellers after two of its executives at a branch were arrested over alleged money laundering.

“We have temporarily suspended transactions in a few current accounts as a part of a larger enhanced due diligence exercise being conducted on transactions post-demonetisation,” the bank said in an e-mailed reply to questions from Reuters.

Axis did not directly comment on the arrests. Last week the Enforcement Directorate, a government agency that fights financial crime, said it had arrested two Axis bank employees for allegedly helping launderers to buy gold with the help of scrapped notes.

The bank said the suspended gold dealers’ accounts will be restored over the next few days after an “enhanced due diligence process”.

A Chennai-based bullion dealer, who declined to be named, said the bank had frozen his account without giving a reason. Half a dozen other dealers in Kolkata, Mumbai, Ahmadabad and New Delhi also confirmed the freezing of their Axis accounts.

The move has brought bullion trading to a standstill, with jewellers fearing attention from government agencies if they make large purchases, said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.