India's Largest Bank Launches Lab-Grown Lending

RAPAPORT... The State Bank of India (SBI) has begun financing synthetics producers and is thought to be the country's first lender to draw up a formal policy for the sector.The government-owned bank will fund purchases of equipment such as growing machines, a source at SBI told Rapaport News Wednesday on condition of anonymity. It will not yet finance the procurement of lab-grown rough. Lending will mainly take place through term loans - credit offered for company expansion and capital equipment with a fixed payback schedule - rather than working-capital loans.The Mumbai-based company, India's largest bank, will target the expanding community of chemical vapor deposition (CVD) makers in the Gujarat diamond city of Surat. It made its first loans to a small number of borrowers in the past month, the source said. The machinery will be the primary security, with the companies putting up other times such as property - and not the stones - as collateral."This is the first step the bank has taken," the source noted. "This is a new industry [that's] emerging. So any bank would [want] to go gradually. I think State Bank is the first one to start [in the sector]."In May, India's Gem & Jewellery Export Promotion Council (GJEPC) called for the government to promote the lab-grown sector, estimating it could contribute up to 150 million polished carats a year. One of its priorities was helping Indian companies obtain machinery for diamond synthesis.Image: A lab-grown diamond with a magnified girdle inscription. (Shutterstock)