The Government of India had complained of gold traffickers in the gulf region whose base of operations was constantly being broadened, especially in Kuwait, Bahrain and Dubai. Smugglers used to take gold to the Indian sub-continent and return with Indian rupees which were valid for circulation in the region and were exchanged for more valuable foreign currencies to be used by the smugglers to buy more gold. Towards the end of the 1950s, the volume of gold trafficking had become so large that it inevitably precipitated a serious depletion in the foreign cash reserves at the Indian Reserve Bank and was causing economic damage arising directly from the smuggling operations.