Indian diamond traders purchasing from Alrosa to be eligible for Russian loans
Indian diamond traders who purchase rough diamonds from Russia-based mining business Alrosa, along with businesses from other countries, will be eligible for loans from Russian banks, a boon to Indian businesses struggling to avail bank loans in India.
As Indian diamond businesses struggle to access bank loans in the wake of the Nirav Modi fraud scandal at the Punjab National Bank, they may be able to look to Russia for financial aid, ET Bureau reported. Russian banks have begun to give loans to Alrosa’s foreign business customers for purchasing rough diamonds. Authorised sightholders, who purchase large orders, can also buy down to 55% of the contracted volume to keep inventory manageable.
“This will definitely help those who buy rough diamonds from Antwerp,” the Gem and Jewellery Export Promotion Council’s vice chairman Colin Shah said, ET Bureau reported.
“ABN Amro Bank has already reduced its financing for rough diamond purchases and cut down credit repayment period. So, if the Russian banks come forward with business-friendly lending norms, then it is good for the Indian diamond trade.”
Alrosa saw a 5% increase in diamond production and a 12% decrease in sales in its operating results for its 2019 financial year, which ended in December, 2019, the GJEPC reported.
This led to a 33% increase in Alrosa’s diamond inventory, as production was grater than sales during the year. The new initiative looks to help Alrosa increase sales and reduce its inventory.
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