GJEPC Urges Govt. to Grant License to ABN Amro

Mumbai: The Gems and Jewellery Export Promotion Council (GJEPC) has urged the Central government that the Reserve Bank of India (RBI) to grant banking license to the Netherlands-based ABN Amro Bank NV, the world’s largest lender to diamond industry, so it could open up its branches in the country.

The request comes following concerns over depleting finance in the Indian diamond industry by certain Indian banks that are also asking for extra collaterals.

Last week, a GJEPC delegation led by chairman Vipul Shah met commerce secretary, government of India, Rajeev Kher and had detailed discussions on a number of issues of concern to the industry.

The delegation told Kher that ABN is the largest lender to the diamond industry and this would help the Indian diamantaires including small and medium firms to get easy finance.

Sources said the Netherlands-based ABN Amro Bank NV has applied to the Reserve Bank of India (RBI) for a licence to open a branch in the country less than four years after selling the business to the Royal Bank of Scotland Group Plc (RBS) as part of a $97 billion global deal.

The move marks the second such instance of a bank returning to India in the past few months. In March last year, the Australia and New Zealand Banking Group Ltd (ANZ) received RBI approval to start a branch in the country, a decade after it had sold its business to the UK’s Standard Chartered Plc.

“ABN Amro, now owned by the Netherlands government, plans to re-enter India to revive its core diamond financing business and also to tap fast-growing loan demand. The bank has extensive involvement in the diamond business and they want to stick with that. India being a global hub in diamond polishing and value addition, they want to be here,” said a senior office-bearer of GJEPC.

Vipul Shah said, “Indian diamond companies are finding it difficult to get finance from the banks, especially after the closure of ADB bank and the Standard Chartered drastically reducing its exposure to the diamond industry.”