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Gems and Jewellery sector's wish list to tackle crisis
06
Dec '08
Mr Mehul Choksi
Mr Mehul Choksi
FICCI Gems and Jewellery Committee Chairman Mr. Mehul Choksi in a recent meeting with the Commerce Secretary Mr. G.K Pallai have proposed the following measures:

1.Pre-shipment finance period may be increased to 180 days from 90 days and post-shipment finance period may be enhanced to 270 days from 180 days at the uniform rate of interest @ 7 % per annum in Rupee
2.Rate of Interest for dollar finance maybe made available @ LIBOR + 0.75 %. Banks maybe instructed to subsidize or do away with their additional charges of commission on granting the above Dollar loans
3.Crystallization period maybe revised to 60 days after due date instead of 30 days.
4.Relaxation of penal interest or crystallization upto a period of next 1 year on all exports made w.e.f 1/1/08 for which payments have been delayed. An additional AD HOC provision to be created to the tune of 25% for an initial period of 1 year in order to maintain consistency. The dollar support for such non-crystallization period may be provided by the RBI.
5.The credit rating of the company should not be effected or reduced due to delay in receivables
6.An provision for discounting outstanding export bills of the Indian exporters with the bankers, against the local bills maybe sanctioned
7.SEZ units may be allowed to sell 25% of their total production to DTA
8.RBI may lend part of its reserves to nominated agencies for further lending the same to Indian exporter to augment shortage of gold bullion in Indian market.
9.Banks may be pressurized to sanction a percentage of their provision to lend gold loans to Indian exporters and strict vigilance to be maintained by RBI with them to not divert funds/limits to other beneficial areas of lending.
10.SEBI may allow Indian Gold ETFS to lend gold to bullion banks at nominal interest rate to improve liquidity in the market.
11.Bullion loans to Indian banks maybe made attractive by reducing/waiving SLR requirements on this product.
12.Concessions maybe given on gold loans granted, on amount of capital allocation required.
13.Government may turn guarantor to Export Credit Guarantee Corporation (ECGC) to ensure the rate of export credit insurance premium may be reduced by the ECGC for our exporters
14.Large bars (London Good Delivery Bars) maybe imported at the same duty of Rs 10300 per kg. Even though weight inscribed on each bar is in Ounces and not in metric units. (Currently duty concession is allowed only to bars which are serially numbered and have weight inscribed by manufacturers in metric units)
15.The import of gold by nominated agencies for supply to exporters should be de-linked from the CRR requirement of banks, as this is acting as an impediment for them to supply gold to the exporters and adding to the high finance costs.
16.Increase in the number of nominated agencies who import gold for easier availability of gold, since gold is an important raw material in the jewellery trade.


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