The Economic Times India reports Indian banks are tightening lending criteria to the industry, following massive defaults in the diamond and jewelry industry amounting to US$1.5 billion. For years, banks in India have been providing credit based on balance sheets, a move the report says is now backfiring. "Banks cannot lend based on balance sheet. One needs to understand the entire business of the clients and how they manage it with their suppliers and buyers,", Ramesh Ganesan, executive vice president, IndusInd Bank commented. According to The Economic Times, Banks are now partnering with global banks such as ABN AMRO and KBC Group or hiring audits to track companies performances before approving credit.