Banks agree to take diamonds as collateral for credit to Antwerp’s diamond trade

The Antwerp diamond trade, which accounts for the maximum supply of rough diamonds in the world, recently received an impetus as a group of banks decided to lend temporary finance against diamonds as a collateral security. The group of banks has agreed to finance the Belgian diamond trade with €1billion, against diamonds as collateral security, provided the government allows the bank lending rules to include gems into the bank books.

This financial support by the banks would help encourage liquidity in the trade and boost confidence of the manufacturers who are facing blocked inventory. Some shun away from sales in the present times due to the discouraging prices of diamonds. Diamonds becoming a collateral would allow the dealers to depend on a totally new source of credit. But for the Belgian banks, the fluctuating diamond prices are a cause of concern and keeping this in mind, they have suggested that the government support them with an independent valuation of the diamonds they secure. The group of banks includes Antwerp Diamond Bank, State Bank of India, Bank of India and ICICI Bank.