The decision follows a campaigning initiative from the Dubai multi commodities centre (DMCC), encouraging banks to provide finance for the capital intensive process and turn shipping volume into physical trade flows.
"Diamond trade in the UAE has witnessed tremendous growth in the past few years with trade volumes expected to touch to US$13.5bn this year, up from US$11.5bn in 2007. However, ready access to diamond financing is crucial in order to translate transhipment trade through Dubai's ports into physical trade within the Emirate. We congratulate HSBC for taking the lead in providing efficient diamond financing services to the trade, and urge other banks to consider setting up similar units,” comments Jean Van der Donckt, director, diamond finance, DMCC.
HSBC's new unit will provide a full range of financial services to the sector, including import credits, working capital and receivables financing. The bank will also be HSBC be able to offer factoring services, precious metals hedging and physical services to accommodate the needs of the entire supply chain.
"We at HSBC are pleased to have been able to respond positively to the initiative of the DMCC and the diamond and jewellery community. With the initiatives of the government we do believe that Dubai has enormous potential and growth opportunities in this sector. We are very keen to work with the DMCC and the diamond, jewellery and precious metals community to develop Dubai into a major global centre for diamonds and precious metals,” comments Ajay Bhandoola, head of diamonds and precious metals, HSBC Bank Middle East.
The DMCC is responsible for facilitating the setting up of diamond banking activities in Dubai and has aided in the development of physical infrastructure and ancillary services to support the diamond trade. It is expected to accommodate over 350 international diamond companies in its Almas Tower.
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