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Published on 29/02/2020 3:58:32 PM | Source: Live Mint

SBI for insurance cover for lending to jewellery industry

Posted in Industry News| #Banking Sector #Industry #SBI #Jewellery #MSMEs

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Country's largest lender State Bank of India (SBI) said on Saturday that the gems and jewellery industry should have insurance cover for banks to "lend courageously" to the sector.

He said the presence of an insurance cover will also lower capital requirement of the industry for jewellery exports.

"Absence of an insurance cover is hurting lending to the gems and jewellery industry by banks. If there is an insurance cover, it will help the bank to lend courageously to the sector," SBI deputy managing director (clients group-I) P N Prasad said here.

Speaking at an event, organised by ICC here, he said the exposure of SBI to the jewellery industry is around ₹20,000 crore, adding that the lending growth to the sector has been muted at present.

The SBI official said the "trust of the bankers on the gems and jewellery industry is not there" because of its practices "which caused misery to the banks".

Fugitive diamantaire Nirav Modi has allegedly defrauded state-run Punjab National Bank of over ₹14,000 crore.

The gem and jewellery industry should be more transparent in terms of ownership, management and valuation, Prasad said.

Some kind of credit guarantee will give freedom to the gems and jewellery exporters in the MSME segment, he said.

Prasad also said gold should be treated as a source of investment in the country.

"For that, there is a need to create awareness among the public," he said.

This story has been published from a wire agency feed without modifications to the text.