Gems and jewellery traders in the country are facing the heat when it comes to raising funds from banks, thanks to the fraud by diamond traders Nirav Modi and his uncle Mehul Choksi.
Gems and jewellery traders in the country are facing the heat when it comes to raising funds from banks, thanks to the fraud by diamond traders Nirav Modi and his uncle Mehul Choksi. The traders rue that because of some wrongdoing by a few people, the entire industry is being made to suffer.
Anandha Padmanabhan, vice chairman, All India Gem & Jewellery Domestic Council (GJC) told reporters on the sidelines of an event here on Tuesday that the industry’s biggest challenge now was to raise funds from the banks.
“Our major challenge today is funding for the industry. Our immediate requirement is around Rs 10,000-Rs 15,000 crore.
Earlier some jewellery retailers went bankrupt. After Nirav Modi case, the issue has gone up pan-India,” he said.
Padmanabhan said the banks have stopped providing loans to traders after the recent developments.
“Because of these issues, our expansion plans have become slow. Banks ask some big jewellers to repay loans as installments and even some traders pay about Ras 10 crore, Rs 15 crore as installments. They encourage us to close the existing loans and are not keen on renewing,” he said.
Pointing out that though the traders have asked the banks to ease the norms, he said that on the other hand, they (traders) are being scrutinised unnecessarily. “We requested them to ease the norms. Today they have completely freezed it. If we want to open three-four branches, we need bank support. Banks are not coming forward,” he said.