GJSCI initiates Project Vanika in alliance with IJMA & Aasmant Foundation in Palghar

With an aim to empower Indian rural women who engage themselves in household activities due to lack of skill, project Vanika was formed.

Post By : IJ News Service On 30 March 2016 10:20 AM
The Gem & Jewellery Export Promotion Council (GJEPC) recently hosted the Diamond, Gem & Jewellery Banking Summit 2014, attended by officials from the banking, gem and jewellery and Ministry of Finance. The purpose was to hold discussions amongst the officials regarding present issues on financing for the gem and jewellery sector, take a look at the current scenario of ECIB and Credit Guarantee in gem and jewellery industry and other burgeoning issues pertaining to banking and finance for exports for the sector. The event was held at the Taj Mahal Palace Hotel, Mumbai.%% During the inaugural session, Dr. Gurdial Singh Sandhu, Secretary, Financial Services, Ministry of Finance, GOI said that, “The government of India was compelled to act stringently in the larger interest of country by raising import duty on gold and introducing 80:20 gold import guidelines.” He also added by,saying that” export is a priority sector for the government of India and necessary steps will be taken by the Government to ensure its growth in the international market.” %% Both Mr. S.S. Mundra, Chairman, Bank of Baroda and Ms. Arundhati Bhattacharya, Chairman, SBI, pointed out that industry players need to be more transparent in their business operations, and more compliant with the changing banking scenario in national and international markets. Ms Bhattacharya noted the industry should maintain 3Cs: Confidence, Corporatization and Collateralization and stressed that the industry needs to understand that a change in the international banking scenario would affect the Indian banking scenario. Both the leading bankers have expressed their full confidence in the Gem and Jewellery industry and that it can further attract Foreign Direct investment in the country. However, they expressed deep concern that certain incidents in the industry which occurred post the 2008 global economic recession which have created a large trust deficit between the bankers and the industry. The current collective challenge is to uphold the trust and the need to strengthen the same to ensure this decade long fruitful association continues in the future. Bankers indicated they need to interact with the Government to discuss the issue of financing the consignment sale of jewellery from Special Economic Zones, especially SEEPZ at Mumbai. %% The panel discussions clearly indicated that bankers in the current scenario of occurrence of many NPAs strongly feel that the industry now needs to be more transparent in their business operations. Whereas the industry feels bankers need to initiate procedures to share and adopt best practices for each others to minimize their risks. Bankers expressed concerned over ECGC's refusal to adopt ECIB policies for enhanced credit limits. Whereas everybody agrees that this is not the ideal situation and will be a big hindrance in growth of exports, there is a general disagreement on who will take the risk ultimately, the banks or ECGC. The Industry clearly believes that , whereas banks cannot outsource their due diligence obligations and mitigate risks by only taking policies from ECGC on exporters turnover, at the same time ECGC should have adequate paid up capital from government to provide requisite covers to the high value industry like the Gem and Jewellery industry. %% Mr. N. Shankar, CMD,.ECGC stated that they need to limit their exposure to a particular industry and also cannot take the ECIB cover at its face value, which is sanctioned by the banks. However, he has promised to take up the issue of increase in capital and deduction of exposure limit from 50% to 40% which would further ensure the growth in the industry. The decision of introduction of multi-buyer policy has also been well received by the industry. %% Bankers need to carefully and minutely follow the due diligence procedures and employ personnel for regular interaction with the industry. Banking developments like BASEL III regulations and provisioning of extra capital for unhedged foreign exposure by banks has impacted the industry. Bankers strongly feel that the track record of the promoter of the company needs to be assessed and examined carefully before financing his/her company. %% Mr. Vipul Shah, Chairman, GJEPC, thanked the participants and referring to the relation between the industry and banking sector, he added, “If we have found out some concrete directions about how to increase that synergy, trust and confidence, then we have earned the day.”

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