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India’s Largest Bank Launches Lab-Grown Lending
Aug 11, 2022 4:41 AM
By Joshua Freedman
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![](FilesRep/Gallery/Lab grown diamond credit shutterstock 2154557685 520.jpg)
RAPAPORT... The State Bank of India (SBI) has begun financing synthetics producers and is thought to be the country’s first lender to draw up a formal policy for the sector.
The government-owned bank will fund purchases of equipment such as growing machines, a source at SBI told Rapaport News Wednesday on condition of anonymity. It will not yet finance the procurement of lab-grown rough. Lending will mainly take place through term loans — credit offered for company expansion and capital equipment with a fixed payback schedule — rather than working-capital loans.
The Mumbai-based company, India’s largest bank, will target the expanding community of chemical vapor deposition (CVD) makers in the Gujarat diamond city of Surat. It made its first loans to a small number of borrowers in the past month, the source said. The machinery will be the primary security, with the companies putting up other times such as property — and not the stones — as collateral.
“This is the first step the bank has taken,” the source noted. “This is a new industry [that’s] emerging. So any bank would [want] to go gradually. I think State Bank is the first one to start [in the sector].”
In May, India’s Gem & Jewellery Export Promotion Council (GJEPC) called for the government to promote the lab-grown sector, estimating it could contribute up to 150 million polished carats a year. One of its priorities was helping Indian companies obtain machinery for diamond synthesis.
Image: A lab-grown diamond with a magnified girdle inscription. (Shutterstock)
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Tags:
Banking, finance, India, Joshua Freedman, lab-grown, lab-grown diamonds, lending, SBI, State Bank of India, Synthetic diamonds, Synthetics
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