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

Punjab National Bank's exposure is 1,800 cr; others include Canara Bank,Exim Bank,Vijaya Bank,Union Bank,others.

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. 8220;A team of bankers is visiting Dubai to find out the actual position. The exposure of the banks is around Rs 7,000 crore,8221; Oriental Bank of Commerce Chairman and Managing Director S L Bansal said.

Yesterday,Crisil downgraded the rating of the company to 8216;D8217; and placed it under watch list in view of continuous default of the company8217;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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Other banks which provided loans to the company include,Canara Bank,Exim Bank,Vijaya Bank,Union Bank of India,Bank of India,Central Bank of India and Oriental Bank of Commerce and Bank of India.

Sources said that South Africa based Standard Bank,one of the international bullion lenders that supplied the gold to Winsome Diamonds and Jewellery,has moved UK courts to overcome a legal hurdle in recovering money from banks in India.

The company scrip closed at Rs 14.30,down 0.35 per cent on the BSE today. PTI DP CS SA 05151728