Exposure at Rs 7,000 cr, banks rush to UAE over Winsome Diamonds claims

Winsome diamondsExposure at Rs 7,000 cr, banks rush to UAE over Winsome Diamonds claims. (Reuters)

A team of bankers is visiting Dubai to find out the reasons for loan repayment default by Mumbai-based Winsome Diamonds and Jewellery after the company claimed that it could not clear dues as its Gulf customers failed to pay instalments. "A team of bankers is visiting Dubai to find out the actual position. The exposure of the banks is around Rs 7,000 crore," Oriental Bank of Commerce Chairman and Managing Director S L Bansal said.

Yesterday, Crisil downgraded the rating of the company to 'D' and placed it under watch list in view of continuous default of the company's overseas customers and consequent development of Letters of Credit (LCs).

According to sources, banks want to ascertain Diamonds and Jewellery, formerly known as Su-Raj Diamonds claim that the company could not repay as its overseas customers failed in their financial commitment due to financial distress.

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Banks grew suspicious after officials belonging to the Dubai office of a bank could not gather information and locate the offices of these overseas customers to whom Winsome had exported jewellery, sources said.

According to a senior official of Central Bank of India, the team would verify whether the buyers are making true declaration or not. Banks would like to know how could 10 parties of Winsome could default at the same time.

Punjab National Bank, the lead bank of the consortium, has an exposure of more than 1,800 crore to the Winsome Group.

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