$35.59 billion in FY17 from $15.66 billion in FY05, showing a 7% CAGR. In case of divergence, the bank has written to its borrowers to raise the collateral level to at least 40-50% of the loan value or cut the size of the borrowing by half.Earlier, loans were given on easier terms with 10-15% collateral which is now being corrected.“In principle, we review the underwriting system whenever delinquency comes into question,” said SBI dputy managing director Sunil Srivastava. But being the largest bank, we can’t get out of this space which contributes to dollar inflows and job creation,” SBI’s Srivastava told ET.India is one of the largest exporters of gems and jewellery. Net exports of gems and jewellery rose toBut immediately after the Nirav Modi scam broke out, banks have clamped down on the issue of bank guarantees such as letters of undertakings (LoUs). Overseas branches of Indian lenders have also tightened their purse strings for trade finance against bank guarantees and demanded more documents to know suppliers to their borrowers.A bunch of employees at PNB were caught issuing fake LoUs in the country’s biggest ever corporate fraud involving diamond merchant Nirav Modi, calling the banks’ and regulator’s supervisory system into question.The gems and jewellery sector provides jobs to over 25 lakh, and contributes 6-7% to India’s GDP.

Source: Economic Times March 11, 2018 17:26 UTC