Banks Seek to Declare J B Diamond a Defaulter

A leading diamond company and DTC sightholder, J B Diamond, is reported to have failed to repay the loans borrowed from a consortium of banks, according to a report in the Times of India. Headquartered in Surat, India, the company is said to have outstandings of over Rs.1,000 crore. The banks have stated their intention to approach the RBI, seeking to declare J B Diamond as a defaulter and blacklist its associates in India, the report says.

A sum of Rs 800 crore had been borrowed two years ago from 12 leading banks, for meeting working capital needs, but the same has not been entirely repaid yet. According to reports, the company now has to repay the banks over Rs.1000 crore.

The non-payment has evoked a strong response from the bank consortium. In a meeting with the Gem and Jewellery Export Promotion Council (GJEPC), the apex body for the Indian gem and jewellery industry, the bank consortium led by SBI, has threatened strong action. The GJEPC, the report states, has expressed its intention to co-operate with the banks and seek to sort out the issue. This is with the aim of sustaining a level of confidence in the industry. The newspaper reports that the banks also intend to approach the DTC with a request to cancel the sightholder status enjoyed by the company.

J.B Diamond is promoted by diamantaire Jivraj Suarni (Dharukawala). Media reports also state that the company says it has repaid Rs. 100 crore in securities and Rs.260 crore in cash. The company was also quoted as saying that failure to repay the entire outstanding was due to non-payments by its overseas clients and that it would clear all outstandings with the banks once the money due is received.