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.

With a view to helping the diamond sector workers to tide over the distress caused to them on account of loss of jobs/work, soft loans with elongated repayment cycle, will have to be considered, based on their identification by their employers.

The diamond sector units will, however, have to sponsor such workers to the banking system. Banks may consider rescheduling of existing housing, educational and personal loans of diamond workers on a case to case basis. Small monetary limits may be considered by banks for workers through General Credit Cards (GCCs), with relaxations, as may be appropriate.

An education fund will have to be constituted to help payment of school fees of children of displaced diamond sector workers.

The recommendations were made on the basis of detailed discussions the members of the task force had with various associations of the diamond industry and the Diamond Workers' Union in Surat.

The survey was coordinated by the State Bank of India and the government of Gujarat with support from the departments of finance, industries and labour of the government of Gujarat and major banks, including the State bank of India, Bank of India, Bank of Baroda, Dena Bank and SIDBI.

The task force comprised officials of the Gujarat state government, banks, the Small Industries Development Bank of India (SIDBI) and the State Level Bankers' Committee (SLBC) convenor.