The Punjab National Banks BSE -0.61 % scam has come as a bolt
from the blue for the gold industry and at the wrong time. The industry, after
a tepid 2017, was limping back to normal and hoping for a better year in 2018.
A broad-based global recovery, with uptick in demand and prices, was
strengthening these hopes. Domestically also, the pangs of the uniform tax code
and demonetization were ebbing out. Headwinds were slowly giving way to
tailwinds. News of a 7.2 per cent economic growth at home should have lifted
sentiments, but there came the scam.
We can anticipate tightening of credit flows to
the sector, though gem and jewellery still account for only a fraction of total
lending. According to RBI data, bank loans to the gems and jewellery sector as
of December 2017 stood at Rs 69,000 crore which translates to less than 1 per
cent of the gross bank credit of Rs 73 lakh crore. We must be prepared for a
delay, additional documentation, extra guarantees etc in securing loans. That
is fine for genuine players who depend on banks for short-te ..
Read More :- PNB Updates
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