Diamond Dollar Account Scheme
Diamond Dollar Account Scheme
Diamond Dollar Account (DDA) scheme allows firms and companies dealing in purchase or sale of rough or cut and polished diamonds or precious metal jewellery with at least three years in import of export of precious metals or jewellery to carry out business through a Diamond Dollar Account. Diamond dollar account allows those firms and companies to transact in USD without having to convert to remittances to Indian rupees.
Eligibility Criteria
Diamond dollar account can be opened by firms and companies dealing in purchase / sale of rough or cut and polished diamonds / precious metal jewellery plain, minakari and / or studded with / without diamond and / or other stones, with a track record of at least 3 years in import / export of diamonds / coloured gemstones / diamond and coloured gemstones studded jewellery / plain gold jewellery, and having an average annual turnover of Rs 5 crore or above during preceding three licensing years.
In addition, the following criteria must be verified or followed by the Banker while opening a diamond dollar account:
- The exporter should comply with the eligibility criteria stipulated in the Foreign Trade Policy of the Government of India, issued from time to time.
- The DDA shall be opened in the name of the exporter and maintained in US Dollars only.
- The account shall only be in the form of current account and no interest should be paid on the balance held in the account.
- No intra-account transfer should be allowed between the DDAs maintained by the account holder.
- An exporter firm / company shall be permitted to open and maintain not more than 5 DDAs.
- The balances held in the accounts shall be subject to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements.
- Exporter firms and companies maintaining foreign currency accounts, excluding EEFC accounts, with banks in India or abroad, are not eligible to open Diamond Dollar Accounts.
Features of Diamond Dollar Account
A diamond dollar account would allow an firm involved in precious gems or precious metal import or export to deal completely in US dollars. Some of the features of a diamond dollar account are:
- Amount of pre-shipment and post-shipment finance availed in US Dollars.
- Realisation of export proceeds from shipments of rough, cut, polished diamonds and diamond studded jewellery.
- Realisation in US Dollars from local sale of rough, cut and polished diamonds.
- Payment for import / purchase of rough diamonds from overseas / local sources.
- Payment for purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources.
- Payment for import/purchase of gold from overseas / nominated agencies and repayment of USD loans availed from the bank.
