India’s Gem & Jewellery Export Promotion Council (GJEPC) is trying to address the fallout from the Punjab National Bank fraud case of nearly $2 billion involving jewelry moguls Mehul Choksi and Nirav Modi. As the banks have tightened lending norms to the gem and jewelry industry, GJEPC has announced it will “collaborate with leading banks and release a white paper in a Banking Summit on May 11 in Mumbai”, according to Gem Konnect.
The paper, titled “Diamond Financing 2018 — New Challenges”, will address “critical banking issues”, including assessment of credit limits, collateral security, related party transactions, inventory valuation and subsidiary financing guidelines. It asks bankers “not to reduce their current credit limits as this would further hamper and erode the exports of the country and hamper employment”.
GJEPC Chairman Pramod Agrawal said, “The banking seminar gives us a joint forum to regain trust and ensure all bankers have a profitable experience in lending this trade […] The white paper will be historic for any industry and will play a critical role in creating an enabling environment for this labour intensive sector going forward”.
