GJEPC requests govt to increase its contribution to ECGC

SURAT: Vipul Shah, chairman of the Gems and Jewellery Export Promotion Council (GJEPC) has requested the Modi-government at the Centre to increase the Central Government's contribution at Export Credit Gaurantee Corporation of India Limited (ECGC), so that it can take care of the needs of high value sectors like gems and jewellery.
Shah who was speaking at the diamond, gems and jewellery banking summit-2014 in Mumbai on Saturday, said that while "sanctions" have been given for new loans by banks, they cannot be utilised as ECGC has refused to provide credit guarantees to banks on exports against the enhanced limits.The only other alternative put forward by the banks to the exporters is by providing a 50% collateral, which is not realistic for this high value industry. Insurance, seems to have become the preferred risk management for banks, for which the entire gems and jewellery industry seems to suffer.
"One of our other key demands is to the IRDA and that is of opening of the gems and jewellery sector to allow banks take covers from the international credit guarantee institutions. This will allow the banks to mitigate the risk factor and that the flow of credit in the gems and jewellery sector could be increased" Shah said.
Shah said that the banks are in the business of financing, many in the industry are in the business of diamonds, gems & jewellery through generations. Both businesses can only run through trust, relationship and goodwill. There is no other way in running these businesses. Thus, the banks need to trust the inherent strength of the sector and walk together.