The Reserve Bank of India (RBI) has agreed that banks in the authorized dealer categories can extend their credit periods beyond 180 days with immediate effect, according to a report on the Gem and Jewelry Promotion Export Council (GJEPC) web site.
"The decision has been taken in consultation with the government of India 'to ease the operational difficulties faced by the importers'."
The central bank is requesting that several conditions be observed, however, to ensure the expanded credit period is genuine.
Ajesh Mehta, Convener of the GJEPC’s Banking, Insurance & Taxation Sub-Committee, said that the GJEPC had been asking the government to relax the conditions.
“It is a very positive one for the diamond industry, particularly in the current market scenario. Manufacturers will now have a certain flexibility in dealing directly with their bankers in cases where circumstances beyond their control lead to delays."
He explained further that it would also aid the industry in coping with delays arising from bottlenecks caused by external factors, such as during the certification and grading process.