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Amiti Sen In a bid to improve the image of the industry following the Nirav Modi bankruptcy scam, gems and jewellery exporters are taking steps to strengthen self-regulation.
As part of the effort, the sector is asking banks to lend to only those companies that are registered on the ‘My KYC Bank’ portal, which has extensive information on businesses and their customers.
“We are not ready to take responsibility for the fraud that has been committed by a few, as it has nothing to do with us. But we are certainly taking steps towards better self regulation,” Pramod Agrawal, Chairman, Gems & Jewellery Export Promotion Council (GJEPC), told BusinessLine .
Multiple agencies are probing the alleged nexus between scamsters and the diamond trade after the case of Nirav Modi defrauding Punjab National Bank of an estimated ₹12,000 crore came to light earlier this year. Market regulator SEBI is also reportedly investigating cases where diamond traders have been associated with stock market-related irregularities.
Transparent operations
The first important step which the GJEPC — a representative body of exporters of gems and jewellery working under the Ministry of Commerce & Industry — is taking is to urge all people in the business to register under its ‘My KYC Bank’ portal, launched last year, for total transparency in operations.
‘My KYC Bank’ is a centralised KYC repository-cum-exchange platform for the gems and jewellery industry. All industry participants can update their own KYC information and documents on a single window and subsequently share the same with their trading partners.
“If you are a bank lending to a company registered in the portal, then you would have all information about the company you are lending to, including its subsidiaries,” said Colin Shah from Kama Schachter Jewellery Pvt Ltd.
So far, about 2,000 companies are registered on the portal. The GJEPC is trying to spread awareness in the industry on the need to register and increase the numbers. The final registration is done on the basis of documents ratified by the verification team.
Sustainable development
The industry is also trying to work with the government towards establishing and achieving sustainable development goals. The GJEPC is working on a plan to create more employment and provide education to the workers. It is also steps to cut down on illegal traffic of precious stones.
“We want the industry to subscribe to the sustainable development goals which will also help to move towards self-regulation,” Agrawal said.
India’s net exports of jewellery in FY17 stood at $35.5 billion, against $32.68 billion in the previous year. In February 2018, exports declined 7.38 per cent to $3.67 billion as the 5 per cent VAT on jewellery imposed by Dubai started taking its toll, according to GJEPC.
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