Jewellers are facing challenges in availing funds from banks following the PNB fraud case in which diamond traders Nirav Modi and his uncle Mehul Choksi are allegedly involved, a top industry official said today.
Nirav Modi and Choksi are being investigated by the Enforcement Directorate (ED) for allegedly cheating Punjab National Bank (PNB), the country's second largest lender, to the tune of more than USD 2 billion or over Rs 13,000 crore.
"Major challenge today we face is funding for the industry. Our immediate requirement is around Rs 15,000 crore. Earlier some jewellery retailer went bankrupt. After Nirav Modi issue, the issue has gone up pan-India," Gem and Jewellery Council vice-chairman Anandha Padmanabhan said.
The ED recently moved a special court in New Delhi, seeking to declare Nirav Modi and Choksi as 'fugitive economic offenders' and to confiscate their assets worth Rs 3,500 crore.
Padmanabhan said the banks have stopped issuing loans to traders after the "recent developments."
Today they have completely freezed it. If I want to open three-four branches, I need bank support. Banks are not coming forward."