RBI eases lending norms for diamond industry

07 March 2009

The Reserve Bank of India has suggested expeditious restructuring of the existing borrowal accounts of diamond units, financing diamond sector units not financed earlier, re-training / re-skilling / rehabilitation of displaced diamond workers and providing financial relief to diamond workers in order to get the industry out of the current slump.

RBI has issued detailed guidelines for suitable restructuring of borrowal accounts of the diamond units. Banks will take suitable measures to expeditiously release the benefits of restructuring, an RBI release said.

The RBI directive follows recommendations of a task force that look into the problems faced by the diamond Industry in Gujarat.

In order to enhance the liquidity support to the industry, banks will examine the scope for lending against stock of polished diamonds held by units in their inventory.

Banks may consider proposals for credit support to new diamond sector enterprises, which will generate employment for the workers. Banks may also explore the possibility of financing procurement of rough diamonds from reputed agencies for cutting and polishing, to maximise employment of workers, it said.

Suitable training programmes will be organised at district level by the district administration to train displaced diamond workers for alternative employment. The district authorities may also identify and sponsor all eligible workers for appropriate financial assistance / loans under various government schemes.