The Reserve Bank of India (RBI) has agreed that banks in the authorized dealer categories can extend their credit periods beyond 180 days with immediate effect, according to a report by the Gem and Jewelry Promotion Export Council (GJEPC).
"The decision has been taken in consultation with the government of India 'to ease the operational difficulties faced by the importers'."
The central bank is demanding that several important conditions be observed, however, to ensure that expanded credit period request are genuine.
Ajesh Mehta, Convener of the GJEPC’s Banking, Insurance & Taxation Sub-Committee, said that the GJEPC had been asking the government for some time to relax the credit conditions.
“It is a very positive one for the diamond industry, particularly in the current market scenario. Manufacturers will now have a certain flexibility in dealing directly with their bankers in cases where circumstances beyond their control lead to delays."
He explained that it would also assist the trade in dealing with delays due to bottlenecks caused by outside factors, including, for example, the certification and grading process.
