What changed
The Government of India amended Para 4A.19 of the Foreign Trade Policy 2004-2009, reducing the required track record for firms to open Diamond Dollar Accounts from 3 years to 2 years. The minimum average annual turnover over the preceding three licensing years was also lowered from Rs 5 crore to Rs 3 crore.
What it means for you
More diamond and jewellery firms now qualify for DDAs, expanding the pool of eligible customers for banks. AD Category-I banks can open these accounts for a wider set of exporters/importers, potentially increasing forex business and fee income. Banks must update their internal eligibility checks and customer onboarding processes accordingly.
What you must do
- Update internal DDA eligibility criteria to reflect 2-year track record and Rs 3 crore average annual turnover.
- Train staff handling trade finance and forex accounts on the revised norms.
- Communicate the relaxed criteria to existing and potential diamond/jewellery clients.
- Ensure compliance with the current Foreign Trade Policy and other unchanged terms from Circular No. 51 dated Feb 13, 2009.
Who it affects
AD Category-I banks, Firms dealing in diamonds, coloured gemstones, and precious metal jewellery, Exporters and importers in the gems and jewellery sector
What are the key eligibility changes for Diamond Dollar Accounts?
The minimum track record in import/export of diamonds/gemstones/jewellery is reduced from 3 years to 2 years, and the average annual turnover threshold is lowered from Rs 5 crore to Rs 3 crore over the preceding three licensing years.
Do the other terms and conditions from the earlier circular remain?
Yes, all other terms and conditions mentioned in A.P. (DIR Series) Circular No. 51 dated February 13, 2009 remain unchanged.
Which banks are authorized to open Diamond Dollar Accounts?
Only AD Category-I banks are permitted to open and maintain DDAs for eligible firms and companies.