The Reserve Bank of India (RBI) is allowing banks in the authorized dealer categories to widen credit periods beyond six months with immediate effect, the Gem and Jewelry Promotion Export Council (GJEPC) reports on its web site. "The decision has been taken in consultation with the government of India 'to ease the operational difficulties faced by the importers'." However, the RBI is demanding that several conditions be observed to ensure the expanded credit period is for genuine reasons.
Ajesh Mehta, Convener of the GJEPC’s Banking, Insurance & Taxation Sub-Committee, commented that the trade body had been asking the government for the relaxation in conditions for some time. “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 added that it would also help the industry to cope with delays arising from bottlenecks caused by external factors, such as during the certification and grading process.