RBI Strict Norms For Banks Creates Distress In Indian Diamond Market

Posted on: May-2018 | By: Pro Market Reasearch | Business Services & Administration

“Normally, diamond exporters raise money from banks on export bills. Earlier, the banks did not exercise strict vigilance in the monitoring of every export bill, but now the banks are monitoring every export bill and questioning if there is any kind of disturbances,” Gem and Jewellery Export Promotion Council’s (GJEPC) senior executive, gave the information on the condition of anonymity.

GJEPC's chief chairman Vipul Shah says that strictness of the banks in distributing loans to the industry will harm the small and medium units. He said, “The government wants the sector to progress, but for this, it will have to take some guidelines regarding the bank finance of this sector. We have to raise this issue in front of banking secretary and finance ministry.”

Significantly, Gujarat, especially Surat and Saurashtra, has more than 10,000 small and medium diamond polishing and cutting units.

GJEPC Regional Chairman and Surat Diamond Association's former President Dinesh Navadiya shared his experience and said that when he went to a large public sector bank to finance for finance for his diamond manufacturing unit, he was clearly denied.

Navadiya said, “Surat's big diamond units are not having trouble getting finance. Small and medium units are getting difficult. The government should make a policy memorandum for these units and they should be invited to deal with a particular bank.”