Rs 114-bn PNB scam: Spotlight back on hawala trade in diamond industry With the diamond industry going through a rough patch and two of its big names — Mehul Choksi and Nirav Modi — accused of fraudulent activities, the issue of illegitimate channels such as hawala and round tripping of diamonds is again gaining prominence. ALSO READ: PNB scam: Firestar's Vipul Ambani created disproportionate assets, says CBIIndia exports polished diamonds worth around $35 billion a year. It is the biggest processor of rough diamonds.ALSO READ: Sensex can dip to 30,000; PNB scam dents investors' confidence: Marc FaberHowever, when imports of polished diamonds and exports of rough diamonds take place, there are issues of round-tripping.According to the Gem & Jewellery Export Promotion Council (GJEPC) data, in 2017-18 till January, India exported rough diamonds worth $1.175 billion against $1.5 billion in full year 2016-17.India imported polished diamonds worth $1.88 billion in the first 10 months this year. When diamonds are sent abroad as consignment sales (such sales are treated as export if they are sold), some unsold ones return. Even the proportion of return consignments has doubled over the past two years, according to an industry executive.An industry source said: “The diamond trade continues to be a conduit of laundering money. ” With the government increasing the import duty on polished diamonds, first to 2.5 per cent and then to 5 per cent, the modus operandi keep changing and non-standardisation of prices has introduced distortions into the trade.Some players use coloured gem stones to launder money because there are difficult to value. In the case of rough diamonds, on which there is no import duty, the customs department is not concerned with what comes in. Click Here To know More - Pnb bank share price

With the diamond industry going through a rough patch and two of its big names — Mehul Choksi and Nirav Modi — accused of fraudulent activities, the issue of illegitimate channels such as hawala and round tripping of diamonds is again gaining prominence.

ALSO READ: PNB scam: Firestar's Vipul Ambani created disproportionate assets, says CBIIndia exports polished diamonds worth around $35 billion a year. It is the biggest processor of rough diamonds.ALSO READ: Sensex can dip to 30,000;

PNB scam dents investors' confidence: Marc FaberHowever, when imports of polished diamonds and exports of rough diamonds take place, there are issues of round-tripping.According to the Gem & Jewellery Export Promotion Council (GJEPC) data, in 2017-18 till January, India exported rough diamonds worth $1.175 billion against $1.5 billion in full year 2016-17.India imported polished diamonds worth $1.88 billion in the first 10 months this year.

When diamonds are sent abroad as consignment sales (such sales are treated as export if they are sold), some unsold ones return. Even the proportion of return consignments has doubled over the past two years, according to an industry executive.An industry source said: “The diamond trade continues to be a conduit of laundering money.

” With the government increasing the import duty on polished diamonds, first to 2.5 per cent and then to 5 per cent, the modus operandi keep changing and non-standardisation of prices has introduced distortions into the trade.Some players use coloured gem stones to launder money because there are difficult to value. In the case of rough diamonds, on which there is no import duty, the customs department is not concerned with what comes in.

Click Here To know More - Pnb bank share price