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Israel’s FIBI Bank Tightens Terms for Diamond Trade
Aug 18, 2016 3:34 AM
By Rapaport News
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RAPAPORT... The Israel Diamond Exchange (IDE) pledged to contest a
decision by First International Bank of Israel (FIBI) to tighten its lending standards
for the trade.
FIBI raised collateral requirements for the diamond
industry, prompting IDE president Yoram Dvash to write to bourse members, vowing
to lobby state authorities and persuade the bank to retreat. Dvash claimed
FIBI’s demands are stricter than those applicable to other sectors and alleged
the move was influenced by “pressure” from Israel’s financial regulator.
The IDE will hold an emergency meeting after its members
return from summer vacation this month and also invite public figures from
politics and business to participate in the discussion. The bourse re-opens
August 28.
FIBI “has changed its policy, and what’s even worse from our
point of view is that the pressure for this came from the Supervisor of
Banks unit at the Bank of Israel,” Dvash said in the letter. “It is not
possible for a unilateral decision to be passed without a battle.”
FIBI’s policy change comes at an increasingly challenging
time for borrowers, with key lender Standard Chartered exiting
the diamond industry earlier this year. Antwerp Diamond Bank and
Israel’s Bank Leumi have also left the business in recent years.
The IDE has set up a committee to challenge FIBI’s
decisions, with senior bourse officials “walking the corridors of the Knesset
[parliament] and the government to create a strong political lobby.”
Dvash (pictured) said bourse representatives have been invited to
meetings with Hedva Ber, the Supervisor of Banks, and Karnit Flug, the Governor
of the Bank of Israel.
"All bank CEOs and regulators know diamantaires are a
vital part of Israeli industry and for the country's banks,” Dvash continued.
“Our business is stable and good, and no backward attitudes or agenda will
create a bad situation for us.”
FIBI declined to comment on specifics of its policy change
but a spokesperson said the bank “continues to give credit to the diamond
sector through its branch at the diamond center at Ramat Gan.” The bank lends
with the “caution” required of it, the spokesperson added.
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Tags:
bank, bank leumi, Banking, Banks, collateral, FIBI, finance, First International Bank of Israel, IDE, Israel, Israel Diamond Exchange, lending, Ramat Gan, Rapaport News, Standard Chartered, Yoram Dvash
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