Ghosts of past frauds haunt $60 bn jewellery industry as banks raise alarm

Over the past two weeks, banks have become very cautious about lending to the segment and steps are being taken to ensure that credit is given only to genuine exporters

In his 50 years as a jeweller, Pankaj Parekh has seen a few scams shake the credibility of India’s $60 billion gems and jewellery industry. The latest multibillion-dollar fraud will give banks the impetus to rein in credit for around 300,000 of his counterparts, he says.

Already, Parekh’s business has come under increased scrutiny. One lender last week questioned the validity of a recurring expense charged by a gold supplier for 180 rupees ($2.80) on his books, he said.

“To date, not once had my lender asked me about this charge,” Parekh said over the telephone from Kolkata, where his