The gems and jewellery sector could be severely impacted in the coming months following the multi-crore Punjab National Bank scam , say captains of the industry in Kolkata.
At a national conclave here, they argued that in the wake of the scam the lending process of banks to the jewellery industry is expected to “slow down.”
“There will definitely be some ripple effects and it [the PNB scam] will have a significant psychological impact on the minds of loan givers. Banks will be more cautious from now on when it comes to issuing loans and will rigorously check whether there is any possibility of fraud. This will slow down the lending process [to the jewellery industry],” said Prakash Chandra Pincha, regional chairman (eastern region) of Gem and Jewellery Export Promotion Council (GJEPC), during a four-day conclave.
The PNB authorities had recently revealed a fraud of ₹11,500 crore allegedly involving diamond trader Nirav Modi .
‘Why blame everyone?’
‘However, Mr. Pincha argued that it will “not be logical” to blame the entire industry and dub it “risky” for one scam. “The entire industry cannot be blamed for one person’s deeds,” he said.
Mr. Pincha said the GJEPC had always acted as a “whistle-blower” whenever it noticed any misuse of government schemes.
State president of the India Bullion and Jewellers Association Limited Pankaj Parekh said that following the scam, banks might dub the entire jewellery industry “risky.” Mr. Parekh argued that following the scam not only banks but companies might become more cautious in dealing with the jewellery industry.
“The jewellery industry does not comprise only one person. How can the act of a particular individual impact the entire industry,” asked Subir Kumar Sen, president of the Swarna Shilpa Bachao Committee, the largest organisation of jewellery traders and artisans in the State.
Meanwhile, West Bengal Chief Minister Mamata Banerjee alleged that the scam was “fuelled” during demonetisation and large- scale money-laundering took place. “This is just the tip of the iceberg,” she in a social media post. She alleged that more banks were involved in such irregularities.
