(IDEX Online) - India's Gem & Jewellery Export Council (GJEPC) said the "recent alleged incident of a scam by a diamantaire is of concern to the entire gem and jewelry industry", referring to the Nirav Modi affair.
"The industry strongly condemns any sort of unlawful and illegal actions by any individual, trade or otherwise. It should be noted that when thousands of exporters undertake business lawfully adhering to all norms and practices, prescribed very diligently, incidents of this kind can only take place due to non-adherence to procedures and norms laid down. The Council strongly believes that this incident will not have any contagious effect on the gems and jewelry export industry.
"Bank Finance to the trade is already guided by the stringent norms of the Reserve Bank of India (RBI) and the government of India with detailed internal audits in place on a quarterly and annual basis. This in turn is followed by external audits and a special audit by RBI every few years. Every SWIFT transaction by the bank is intimated to NOSTRO and the International Division (treasury) of the Bank. In addition to this, RBI launched Export Data Processing and Monitoring System (EDPMS) in March 2014 to monitor payments against Export/Import Bill. It is a system where all export/import transactions are captured and followed up till their realization by banks and customs.
"Going by the prevalent compliance system followed, chances of such vast irregularity without any detection across several financial periods are extremely surprising and unreasonable. This only demonstrates lacunae in internal control system and failure or lack of fraud protection measures within the Bank.
"Having said that, the GJEPC expresses its full faith in the Indian banking system. Indian banks have always assisted the industry in adding value, generating employment and earning valuable foreign exchange for the country. We firmly believe that such incidents could happen to any sector and we are confident that the law will take its own course. Nevertheless, the collaboration between the trade and the banking sector should continue in the interest of the country.
"On the one hand, the GJEPC is struggling to garner financing for gem and jewelry exporters, especially the SME Export Sector, who are required to give high collateral for the limit sanctioned to them, and here one finds this kind of clear advances being provided by a bank without any safeguards, which speaks volumes about irregularities that need to be thoroughly investigated. The GJEPC is ready to assist and support all investigating agencies in all possible ways to reach the right conclusion and punish the guilty.
"As an apex council for promotion of gem and jewelry exports, GJEPC condemns the incident and insists there be a thorough investigation in the shortest possible timeframe. The gems and jewelry sector accounts for 7% of the country's GDP, 15% of India's merchandise exports and employs more than 4.5 million people, thus making a significant contribution to the country's economy and maintains global leadership in the processing of diamonds and gemstones.
GJEPC would like to place on record that the Council is propagating amongst trade the 17 sustainable development goals of United Nations and the industry strictly follows ethical business practices and compliance with financial and procedural laws. Such odd instances can at no time hold representation whatsoever of a fraternity which has stood the test of time and contributed generously to the nation's growth through enterprise, hard work and integrity at all times."
The Indian diamond industry, the GJEPC said, has tens of thousands of factories, 6,000 exporters and is a world leader in the processing of diamonds. Total diamond exports stand at $23 billion with a value addition in excess of $7 billion.