NEW DELHI: Indian diamantaires in the world’s largest diamond trading centre in Belgium are facing tough days with the Belgian banks reportedly not lending to anyone linked to the diamond industry.
The Antwerp World Diamond Centre (AWDC) has claimed that they have proofs that banks are systematically refusing customers with any connection to the trade, for both personal and professional banking affairs.
According to US-based Rapaport group, the AWDC stated that the lenders in Belgium snub diamantaires even before they’ve had a chance to submit a formal application to become a client.
The banks’ rationale is that the diamond trade carries a high risk, the AWDC said. But it argued that this was an unfair perception, given how much regulation companies must undergo and the degree to which domestic and international organizations monitor diamond transactions.
Industry sources said that diamonds is a high value business and it cannot be done without the bank financing. Declining to offer banking services is not only limiting the Antwerp trade’s prospects for growth, it’s preventing the industry from becoming more transparent, since a bank account is one of the requirements for registering a diamond business.
Rapaport stated that the AWDC had met 10 times with Belgian finance trade body Febelfin since 2014. Following those meetings, the trade body pledged to embrace the Sustainable Bank Account Access Scheme, under which companies go through an official audit so banks can keep their compliance spending low.
Regional chairman of Gems and Jewellery Export Promotion Council (GJEPC), Dinesh Navadiya said, “The small and medium diamantaires in Surat are procuring rough diamonds from Belgium. When the big traders in Belgium not getting bank finance, it is going to be tough for the diamantaires in Surat to procure diamonds on credit.”
