Some bankers are skeptical of the audits carried out in the industry as there is no centralised system in place for the jewellery industry, and the current IT infrastructure is not up to the mark
Public sector banks have stepped up vigilance on the gem industry in wake of the Rs 13,600 crore Punjab National Bank fraud.
According to a report in The Economic Times, bankers are now doing their due diligence, carrying out audits on the diamond trade by going to diamond exporters and traders. The bankers look to understand global trends in the diamond market, and even look to analyse their inventory.
The report quotes a diamond trader saying that while this might mean choppy waters for the diamond industry in the short run, the industry is expected to increase the transparency in the jewellery sector in the long run.
Some bankers are skeptical of the audits carried out in the industry as there is no centralised system in place for the jewellery industry, and the current IT infrastructure is not up to the mark. The lack of an independent assessor is also a problem.
The CBI is currently investigating under a complaint lodged by State Bank of India.
India processes close to a billion diamonds valuing close to USD 23 billion. Sources in the report state that the domestic consumption of diamonds is expected to fall to three to four percent.
The Gem & Jewellery Export Promotion Council (GJEPC) recently meeting with bankers to figure out risk mitigation in the diamond trade and the road ahead for its financing.