The new Reserve Bank of India fiat to banks about ensuring compliance to the Kimberley Process Certification Scheme for funding diamonds trade, is not expected to affect the trade in any adverse manner.
Ashish Goenka, managing director of Suashish Diamonds, who is a manufacturers and exporter of diamonds and diamond jewellry, said, "This is a positive step. The additional procedure will not hamper trade and will be a good measure for legitimate trade. At least the industry will not be tainted by conflict or blood diamonds."
RBI issued a directive to banks asking them to get a modified undertaking from those clients to whom credit was being extended for any business relating to diamonds.
This directive was primarily being issued to ensure compliance to the Kimberley Process Certification Scheme, which is a UN inititative to discourage trading in 'conflict' diamonds or diamonds mined or sold to fund arms and ammunition.
Tehmasp Printer, the managing director of International Gemological Institute, said most diamonds were imported from large players like Diamond Trading Corporation, Debeers, Argyle and from countries like Russia and Canada, all of which have always avoided conflict diamonds.
"Therefore the chances of such diamonds entering into India are few and trade should not be affected."
Banks were now required to take an undertaking from clients that they were not knowingly doing any business in conflict diamonds.
