SBI Formalises Policy to Finance Makers of Lab-Grown Diamonds
State Bank of India (SBI) is the first Indian lender to frame a policy to fund lab-grown diamonds which are replicas of the natural diamond stones.
Recently factories are being established in Surat, Gujarat to produce lab-grown diamonds and many diamond houses are being relocated from Mumbai, Maharashtra to southern Gujarat.
The policy would be largely term loans for machinery import and a part would be disbursed as working capital.
Key Highlights:
i.These lab-grown diamonds are priced at 30-40 percent lower than the natural or earth-mined diamonds.
ii.SBI’s Diamond Bourse branch, the Bandra Kurla Complex in Mumbai, Maharashtra and the Commercial branch in Surat, Gujarat have been identified for the business.
iii.The SBIs guidelines on funding to produce lab-grown diamond houses include practices like treating non-fund limits on par with funded limits, critically examining the dependency on single buyer as percentage of annual sales, obtaining business credit report on overseas buyers from agencies like Dun & Bradstreet, and maintaining balance-sheet of buyers.
About the lab-grown Diamonds:
i.The lab-grown Diamonds were 1st produced by General Electric in the 1950s by the synthetic diamond technology that involves recreating the pressure and temperature existing in the bowels of the earth in a lab.
ii.Since the local production capacity for lab-grown stones is not available, Gem & Jewellery Export Promotion Council (GJEPC), the apex industry body imported USD 358.3 million worth unpolished lab-grown diamonds in April and June 2022.