Bankers want jewellery industry to become more transparent, compliant to regain trust after Nirav Modi, Mehul Choksi scam

Incidents like the Nirav Modi and Gitanjali Gems have broken down the trust level for the gems and jewellery industry.

Press Trust of India July 04, 2019 08:06:21 IST
Bankers want jewellery industry to become more transparent, compliant to regain trust after Nirav Modi, Mehul Choksi scam
  • Bankers are not averse to financing the gems and jewellery businesses

  • Incidents like the Nirav Modi and Gitanjali Gems have broken down the trust level for the gems and jewellery industry

  • Funding the gems and jewellery business funding is complex, said bankers at a conference recently

Mumbai: Bankers are not averse to financing the gems and jewellery businesses, however, they feel that the industry needs to become more organised, transparent and compliant to regain trust.

"Incidents like the Nirav Modi and Gitanjali Gems have broken down the trust level for the gems and jewellery industry. There is a need to build trust by becoming more transparent and complaint," Union Bank of India chairman Kewal Handa said on Tuesday at the 2-day Manthan Gems and Jewellery Conclave 2019 here.

He said the gems and jewellery industry should learn from the pharmaceutical industry, which had taken steps like becoming more compliant, getting international accreditation and building stronger federation. "Pharmaceutical industry has completely reformed themselves and set up systems and processes for getting more organised," he added.

Bankers want jewellery industry to become more transparent compliant to regain trust after Nirav Modi Mehul Choksi scam

Representational image. Reuters.

The current liquidity crisis in the gems and jewellery industry and bank's non-performing assets have coincided affecting the lenders giving loans to the industry, he said. By the end of 2017, the bank financing to the gems and jewellery industry was at Rs 70,000 crore, which has now come down to less than Rs 30,000 crore, he added.

IndusInd Bank EVP Biju Patnaik, who was also present on the occasion, said the gems and jewellery business funding is complex. "The primary collateral is stock and it is more about inventory financing as the collaterals are moving stock—don't remain with the lender," he added.

NSE managing director and CEO Vikram Limaye said, NSE overcame several challenges by the adoption of technology, focus on customer, compliance and strong market development. These are relevant to jewellers too," he added.

NSE is keen to develop a Gold Spot Exchange with the right structure, he said, adding that commodity exchange needs to have more participation from all key stakeholders.

Updated Date:

also read

Market Roundup: Sensex crashes by over 1,500 points; Nifty at 17,149; check top winners and losers here
Business

Market Roundup: Sensex crashes by over 1,500 points; Nifty at 17,149; check top winners and losers here

Both Sensex and Nifty crashed over 2.5 percent at the end of the trading session, while Sensex fell 2.62 percent to 57,491.51, Nifty slumped 2.66 percent to 17,149.10

Market Roundup: Sensex falls by 427 points, Nifty ends at 17,617; today's top winners and losers
Business

Market Roundup: Sensex falls by 427 points, Nifty ends at 17,617; today's top winners and losers

The top gainers of BSE Sensex were Hindustan Unilever, Maruti, HDFC, Nestle India and HDFC Bank. The top losers were Bajaj Financial Services, Tech Mahindra, Tata Steel, Bharti Airtel and IndusInd Bank

Market Roundup : Sensex falls 634 points, Nifty ends at 17,757; check top winners and losers here
Business

Market Roundup : Sensex falls 634 points, Nifty ends at 17,757; check top winners and losers here

The top gainers were Power Grid, Bharti Airtel, Asian Paints, Maruti and UltraTech Cement. The top losers were Bajaj Financial Services, Infosys, Tata Consultancy Services, Sun Pharma and Hindustan Unilever