State Bank of India official asks for jewellery businesses to be provided with insurance to facilitate lending
State Bank of India official, P. N. Prasad, called for jewellery businesses to be provided with insurance coverage, in order to allow banks to lend to them, as the sector struggles to find financing.
Following a number of disruptions to the Indian jewellery industry, such as the Nirav Modi-Punjab National Bank fraud scandal, many jewellery businesses are finding it challenging to secure loans from banks, which are nervous to lend to the industry. State Bank of India, deputy managing director, Prasad called for insurance cover to be extended to the gem and jewellery industry to enable banks to better finance the sector, the GJEPC reported on its website.
“Absence of an insurance cover is hurting lending to the gems and jewellery industry by banks,” said Prasad. “If there is an insurance cover, it will help the bank to lend courageously to the sector.”
Noting that growth in the jewellery industry is currently “muted”, Prasad postured that insurance cover for jewellery businesses could serve to “lower capital requirement of the industry for jewellery exports.”
Prasad also asked the gem and jewellery industry to be more transparent in terms of its management and business valuations.
The State Bank of India is the country’s largest lender. Prasad estimated that the bank has around Rs 20,000 crore ($3 billion) exposure to the gems and jewellery industry.
Copyright © 2022 FashionNetwork.com All rights reserved.