In a ‘booster shot’ to jewellers, FM tells bankers to sort out issues facing trade

Union Finance Minister Nirmala Sitharaman on Friday asked bankers to sort out all issues concerning jewellery retailers and exporters by January 10, ahead of Pongal festival.

Chairing a meeting of bankers and members of jewellery retailers association in Chennai, Sitharaman said bankers should closely work with the jewellery trade to address issues relating to export credit, loan disbursement, customer facilitation and other banking services.

“It was a very meaningful meeting. The jewellers were allowed to highlight their issues over the counter to the bankers in the presence of the Finance Minister”, a jeweller who participated in the meeting said.

When some of the jewellers highlighted that they are forced to change banks frequently due to poor response or lack of loan availability, the Finance Minister asked the bankers to improve the quality of their service in order to retain their customers.

‘Explanations asked’

A jewellery exporter from Chennai described the meeting as a ‘booster shot’ to the sector as Nirmala Sithraman patiently listened to each of their grievances and, in some cases, asked bankers to explain the reason for delay or deficiency in service.

He explained that whenever there is an inward remittance in dollars on gold exports, banks insist exporters convert them to rupees but buy dollars from them while paying for their future gold imports. “When I sell dollars to a bank, it is at ‘X’ rate but when I buy from them it is at a rate of ‘X+5’ and it’s very unfair on the exporters,” he said.

While some bankers explained that exporters can retain their dollars in Exchange Earners’ Foreign Currency Account (EEFC) or exercise other options, many jewellers were not aware of such options.

The Finance Minister then asked bankers to first educate the customers about various products that are available. She also said bankers must encourage these businesses to register under MSME to avail interest rate benefits.

‘Before harvest festival’

“The meeting was very satisfactory. The Minister asked banks to clear all the grievances of the jewellery sector by January 10 so that the jewellers can apply for fresh loans or avail fresh export credit ahead of the Pongal festival,” a retail jeweller said.

He also represented at the meeting that banks have been wary of lending to the jewellery sector ever since the Nirav Modi scam broke out.

“We said that is the case of diamond exports whereas we retail jewellers are in the business of selling gold jewellery in the domestic market. Whatever loan we take from banks are in the form of jewellery displayed in our showrooms,” he said.