In a letter circulated to clients just before the turn of the year, India’s ICICI Bank UK Limited (Industrial Credit and Investment Corporation of India) announced it will be shutting down its branch in Antwerp effective March 29, 2019, bringing an end to its diamond trade financing. The last working day of the branch will be March 28, 2019, and clients were requested to close their accounts by February 28. The bank entered the Antwerp market in 2006. ICICI’s decision follows that of Union Bank of India last September to pull out of the Antwerp diamond industry at some point in 2019, but that bank has a limited lending portfolio in the city, and the majority of the companies it services have alternative accounts elsewhere.
Diamond financing has faced significant challenges in recent years as the banks have implemented a blanket approach to ‘derisking’, neglecting recommendations from the Financial Action Task Force to approach it on a case-by-case study. In recent years, KBC’s Diamond Bank closed and Standard Chartered discontinued its diamond trade financing. Indian lenders had largely filled the void but earlier this year the diamond industry was hit by high-profile cases: Nirav Modi and Mehul Choksi were implicated in an alleged $2-4 billion fraud involving the use of fake guarantees from Punjab National Bank to solicit loans, a scandal that rocked India’s banking industry.
(2019-1-10, Source: The Diamond Loupe)