Lenders feel "trust deficit" in gems and jewellery
sector
30/06/2014 13:00
Saddled with bad assets like the Rs 6,000 crore Winsome Diamonds account, lenders have come out strongly against shady practices in the gems and jewellery sector, stating that there exists a "trust deficit" that makes doing business with the industry difficult, reported PTI. "As of today, there is a huge trust deficit within the industry, bankers, regulators and government. This is one segment where trust is most important," Bank of Baroda's Chairman and Managing Director S S Mundra said, speaking at a gathering of the gems and jewellery industry over the weekend. According to media reports, his reservations included the likely diversion of funds by the players into real estate, equities and commodity market investments; an "intermingling" between gold, diamond and jewellery verticals which led to interest arbitrage and "confusion" in working capital positions; and even a lack of trust in the trade data put out which makes it difficult to compute the net exchange earning.
30/06/2014 13:00
Saddled with bad assets like the Rs 6,000 crore Winsome Diamonds account, lenders have come out strongly against shady practices in the gems and jewellery sector, stating that there exists a "trust deficit" that makes doing business with the industry difficult, reported PTI. "As of today, there is a huge trust deficit within the industry, bankers, regulators and government. This is one segment where trust is most important," Bank of Baroda's Chairman and Managing Director S S Mundra said, speaking at a gathering of the gems and jewellery industry over the weekend. According to media reports, his reservations included the likely diversion of funds by the players into real estate, equities and commodity market investments; an "intermingling" between gold, diamond and jewellery verticals which led to interest arbitrage and "confusion" in working capital positions; and even a lack of trust in the trade data put out which makes it difficult to compute the net exchange earning.
