New Delhi, July 25 (KNN) The gems and jewellery sector has witnessed 10% decline in bank finance which will adversely impact the exports, Gem & Jewellery Export Promotion Council (GJEPC) said in its report.

The apex body for the gem and jewellery trade in India set up by the Ministry of Commerce and Industry in its report stated that there has been at least 10 percent decline in bank finance to the gem and jewellery sector which is going to adversely impact exports out of the country.

According to GJEPC, the country’s gem and jewellery exports declined by 8.84% during the june quarter to US$ 10.1 billion as compared to US$ 11.1 billion in the same period last year.

Post Nirav Modi scam, banks and other financial institutions have become stringent in providing loans and also demanding higher collateral security against loans because of which banks finance to the gems and jewellery sector has declined.

Describing the situation as a “crisis of sorts”, GJEPC Chairman Pramod Agrawal said that “the Council is taking all efforts to self-regulate and instill the confidence amongst key stakeholders through a slew of reforms”.

He said that the industry is facing a crisis of sorts as the banks have curtailed lending to the traders and demanding collateral security and extensive documentation.

In such a scenario, Gem & Jewellery Industry, a US$ 41 billion export industry will see a gradual decline in FY 2018-19, he added.

Requesting the government to intervene and give some relief to the ailing industry, he said “It is time to bring back Interest subvention scheme to help in ease of doing business.”

Raising concerns, Colin Shah, Vice Chairman of GJEPC said “Bank finance is the life line of the industry and any decrease would see a decrease in gem & jewellery exports as well.”

 He pointed that after all the efforts to make sure genuine players continue to get the finance, banks are insisting for discounting that all customer invoices should be through the bank which is seriously hampering relationships with customers as well as cash flow on a daily basis.

Banks have also taken away all benefits on assessment fees due to which cost of finance has gone up Shah, added.