The Reserve Bank of India has directed banks to obtain a modified undertaking from all clients being extended credit for doing any business relating to diamonds to ensure compliance with the Kimberley Process Certification Scheme guidelines.

RBI said that under new UN mandated KPCS which has been adopted, among others, by India, it has to be ensured that no rough diamonds mined and illegally traded enter India.

Banks' are required to obtain an undertaking from the client to the effect that it is not knowingly doing any business in conflict diamonds as these have been banned vide UN Security Council Resolutions No. 1173, 1176 and 1343(2001) or the conflict diamonds which come from any area in Africa including Liberia controlled by forces rebelling against the internationally recognised government.

Further the client has to undertake not to do direct or indirect import of rough diamonds from Sierra Leone and/or Liberia whether or not such diamonds originated in Liberia in terms of UN Security Council Resolution No.1306 (2000) which prohibits the direct or indirect import of all rough diamonds from Sierra Leone and 1343 (2001) which prevents such import of all rough diamonds from Sierra Leone and 1343(2001) which prevents such import from Liberia.

The client is to also give a consent to withdrawal of all credit entitlements, if at any time, it is found guilty of knowingly having conducted business in such diamonds.

RBI pointed out that various measures have been taken in this regard including a system of import into India of diamonds being mandatorily accompanied by Kimberley Process Certificate.

Similarly, exports from India would also be accompanied by the KPC to the effect that no conflict/rough diamonds have been used in the process.

KPCs would be verified/validated in the case of imports/exports by the Gem and Jewellery Export Promotion Council, which has been designated, under the KPCS, as importing-exporting authority by the Government of India.