Lenders to troubled diamond jewelry exporter Winsome and Forever Precious Jewellery – both promoted by Jatin Mehta -- has started classifying their Rs 8,000 crore exposure as non-performing asset. These banks have made provisioning for the exposure in the first quarter of the financial year. Punjab National Bank which has an exposure of around Rs 1,650 crore to Winsome has declared the loan as sub-standard and has made about Rs 400 crore provision for it, the bank’s chairman and managing director K R Kamath said while announcing the results.
The consortium of lenders had opened letters of credit (LC) for the purchase of gold. Problem started when the bullion banks, Standard Bank of South Africa, Standard Chartered London, and Scotiabank invoked the LC that the banks have issued for Winsome, after the company failed to pay within 90 days, as agreed at the time of the contract.
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