Nirav Modi scam: Diamond traders now courting firms with long-term credit
Posted on 21st March 2018 |
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In the aftermath of the Rs 129-billion fraud at Punjab National Bank (PNB) involving Nirav Modi and Gitanjali Gems, traders of loose diamonds are now shifting to organised sectoral players with deeper pockets for credit offers to consumers.
Since most banks have tightened their lending to diamond merchants and others are in the process of doing so, many medium and small diamond dealers are approaching large players for credit facility within the industry. Early last week, State Bank of India, the country’s largest-public sector bank, announced its decision to tighten collateral demands on borrowers from the gems & jewellery industry. Several gems & jewellery makers and retailers recently observed at the India International Bullion Summit (IIBS) that banks had stopped lending to them as they now had a suspicious view of the entire sector, especially after the PNB-Nirav Modi scam.
With organised sectoral players offering credit to small and medium sized diamond traders, the industry is set to move to a private credit regime. Organised players, including online diamond trading platforms like Indian Commodity Exchange (ICEX), are set to benefit from the ongoing shift in diamond retailing.
“Organised players offer reliable diamond pieces certified by recognised global certifying agencies like the Gemological Institute of America (GIA) and International Gemological Institute (IGI) among others. These diamonds are trustworthy.
Apart from that, organised players also offer credit to small and medium sized players in the absence of credit facility from banks. So, there has been a shift in the business from unorganised to organised sectors,” said Dinesh Navadia, secretary, Surat Diamond Association. Both the jewellery manufacturers involved in the alleged PNB scam – Nirav Modi and Gitanjali Gems – were said to have also been selling American diamond by passing them off as natural ones at much inflated prices.
Organised and credible diamond certifying agencies have also witnessed a substantial increase in their volume intake over the past five weeks – since the scam broke out. Manoj Dwivedi, joint secretary in the Union commerce ministry has, however, called for a strong self-regulation in the gems & jewellery sector to avoid the recurrence of a scam.
Informed sources said SBI had reviewed all loans sanctioned to jewellers after the PNB scam broke out to check whether adequate safeguards were taken. The bank has directed its officials to focus on increasing collateral to 40-50 per cent of the loan value or cut the size of exposure in case of any lacunae. Others, however, believe that some banks have started asking for 100-120 per cent of collateral of the value of goods following a ban on letters of undertaking (LOUs) and letters of comfort (LoCs) this week. |
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Bharti Airtel defers Q2 results till Nov 14 over ambiguity on AGR verdict
Posted on 29th October 2019 |
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Bharti Airtel said on Tuesday it has postponed its second-quarter earnings report to mid-November, as the wireless operator sought clarity on the court ruling asking telecom firms to cough up overdue payments to the government.
Shares of the company, which was expected to release its quarterly numbers later in the day, dropped 3.3 per cent in early trade. |
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Rupee slips 8 paise vs US dollar in early trade amid drop in oil prices
Posted on 7th October 2019 |
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The rupee on Monday opened eight paise lower at 70.96 against the US dollar amid drop in crude oil prices and rise in Asian equities. The domestic unit on Friday closed almost flat at 70.88 against after the Reserve Bank of India (RBI) in a widely expected move cut key interest rates by 0.25 percentage point. On a weekly basis, the local unit slumped by 32 paise. |
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LIC pips private insurers in first-year premium growth during April-August
Posted on 13th September 2019 |
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In the first five months of the current financial year, first-year premiums of life insurance companies grew by 39.84% (year-on-year) at Rs 1.05 lakh crore as compared to Rs 75,588.35 crore in April-August of 2018-19. Life Insurance Corporation of India (LIC) continued to grow at a faster pace compared to private insurance players, shows the data from the Insurance Regulatory and Development Authority of India (Irdai). |
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Apollo Hospitals rules out further stake sale
Posted on 13th September 2019 |
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Apollo Hospitals Enterprise (AHEL) has ruled out further dilution of promoters’ stake in the company. The company also said its Rs 1,337-crore stake sale of Apollo Munich Health Insurance with mortgage major HDFC will be concluded by October. Following these stake sales, the promoters’ pledged position will come down from a high of 76% to 54% by October and eventually to 20% by November or December, company sources said here. |
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World trusts India on Kashmir, not us: Pakistan minister Ijaz Ahmed Shah
Posted on 13th September 2019 |
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In a major embarrassment for Pakistan and its Prime Minister Imran Khan, the country's Interior Minister Ijaz Ahmed Shah, a retired brigadier, said the international community didn't believe Pakistan's narrative on Kashmir; instead it is India whose version is trusted. |
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