Rs 130-bn PNB fraud hits expansion plans, jobs at small jewellers

Of the Rs 4-trn jewellery sector, small scale jewellers account for an estimated 62%

The fallout of the Punjab National Bank fraud has hit small and medium size units in the jewellery sector. For, lines of credit to this segment, comprising their operational capital requirement, have shrunk dramatically.

Earlier, industry sources told Business Standard, banks charged 8-12 per cent interest to small or medium jewellers, with 110-120 per cent collateral. However, after the Nirav Modi scam came into the public eye, they are only disbursing loans to these jewellers with 150-200 per cent collateral.
 

“Apart from the gold, jewellers also keep their property as mortgage with the banks. With the amount of collateral increasing,