Money & Banking

Banks to adopt uniform policy for lending to gems & jewellery industry

Our Bureau Mumbai | Updated on July 31, 2019 Published on July 31, 2019

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To support the gem and jewellery industry with credit in the backdrop of the letter of undertaking (LoU) scam at Punjab National Bank, banks have decided to adopt uniform practices vis-a-vis fresh exposure to the industry.

“We have put certain uniform practices in terms of entry barriers, margins, collateral security, direct bill exposure, etc…It is getting implemented across the banking sector,” said PN Prasad, Deputy Managing Director, State Bank of India and head of Gem and Jewellery Export Promotion Council’s (GJEPC) coordination committee.

Prasad elaborated that SBI has been engaging with the gems and jewellery industry for the last one year. It brought out a revised policy for lending to the gems and jewellery industry some time in August-September 2018.

SBI’s revised policy has been circulated to all the other banks through the Indian Banks’ Association (IBA). So, other banks have also more or less adopted the policy, he added.

“What we are trying to achieve is a uniform approach so that the (lending) policy is strengthened. The due diligence on the various stakeholders is taken care via the MyKYCBank platform.

“And also now we are having a list of approved auditors and valuers who can value and help us in monitoring the exposure. These are some of the measures we are taking,” explained Prasad at a banking summit organised by GJEPC.

For SBI, global credit to the gems and jewellery industry has been more or less stagnant at around ₹25,000 crore in the last couple of years. There have been sectoral issues that is why the credit has been stagnant.

Published on July 31, 2019
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