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“A task force will be constituted, consisting of the representatives of the state government, the state-level bankers committee convener, and other bankers to look into the distress arising on account of the problems being faced by the diamond industry,” the RBI said in a statement after a meeting of its Central Board here. The apex bank added that the task force will make practical recommendations for mitigating the difficulties.
“The RBI will be the convener of the task force, which will submit its report not later than February 28,” the statement added.
Dena Bank General Manager M K Jain, said RBI Governor D Subbarao, who was in Ahmedabad on Wednesday for the RBI Board of Directors’ meeting, had held detailed discussions with bankers on this issue. Dena Bank is the convener of the SLBC
He said the task force would consist of representatives from the RBI, SIDBI, EXIM Bank, Dena Bank, SBI, Bank of Baroda and Bank of India among others, besides representatives from the diamond industry and the State Industries Department.
Jain said a major issue that would have to be sorted out was that while most of the diamond units were located in Surat and Saurashtra, they had their banking operations in Mumbai, which could cause operational problems.
The RBI governor said, according to Jain, the apex bank did not issue sector-specific guidelines and therefore, it was the bankers who should discuss among themselves what could be done for diamond sector and then discuss the same with the RBI.
One view expressed was that there was not much for banks to help diamond units except for extending credit because the business was export oriented wherein demand could not be created locally.
The diamond units should find out ways as to how they could bail out their workers through means like skill upgradation and economic rehabilitation among others, so that banks could lend money under bankable schemes through district industries centres. "We are going beyond just banking business," Jain said while elaborating the human aspect of the matter.
Modi asks for special RBI package for diamond, textile industries
AT A meeting with Reserve Bank of India Governor D Subbarao in Gandhinagar, Chief Minister Narendra Modi asked for a special credit package for the diamond, textile and small scale industries affected by the meltdown.
He said the banking sector should take an initiative for these industries to nullify the adverse impact of the ongoing meltdown. He also asked the RBI governor to start drafting state specific policies.
He said the state government had already exempted the diamond industry from VAT (Value added tax) payment.
Dr Subbarao and RBI Regional Director A K Bera were impressed by the achievements made by Gujarat through various initiatives despite the worldwide meltdown.
Later, Modi criticised the Centre for not announcing a relief package for the meltdown-stricken diamond industry. He said he had sought an audience with the Prime Minister in this regard, but nothing has been done so far.
He said those sympathising with the diamond workers were only rushing to Gujarat to shed crocodile tears, and intended to defame him. Protest planned
The Gujarat Congress Ratnakalakar Diamond cell has planned to carry out a protest in Ahmedabad, blaming the state government for turning apathetic towards the lot of jobless workers. On February 16, they intend to ring bells symbolically to call the attention of the state government.
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