SBI opines that the presence of an insurance cover will also lower capital requirement of the industry for jewellery exports. 

"Absence of an insurance cover is hurting lending to the gems and jewellery industry by banks. If there is an insurance cover, it will help the bank to lend courageously to the sector," SBI deputy managing director (clients group-I) P N Prasad told presspersons.

Speaking at an event, organised in Mumbai, he said that the exposure of SBI to the jewellery industry is around Rs 20,000 crore, adding that the lending growth to the sector has been muted at present.

The SBI official said the "trust of the bankers on the gems and jewellery industry is not there" because of its practices "which had caused misery to the banks in the past". The gems and jewellery industry should be more transparent in terms of ownership, management and valuation, Prasad opined. Some kind of credit guarantee will give freedom to the gems and jewellery exporters in the MSME segment.

Prasad also said that gold should be treated as a source of investment in the country. For that, there is a need to create awareness among the public.