DMCC Tradeflow and Commercial Bank of Dubai Launch ‘Loans for Diamonds’May 26, 15
(IDEX Online News) – Commercial Bank of Dubai and DMCC (Dubai Multi Commodities Centre) Tradeflow, an online platform for registering possession and ownership of commodities stored in UAE-based facilities, have launched “Loans for Diamonds” in partnership with Rocks International.
This new product will allow diamonds registered with DMCC's Tradeflow platform (which will act as the central registry) to be used as collateral for trade finance loans. Commercial Bank of Dubai will act as the financier and Rocks International DMCC as the independent Collateral Manager.
“It is an innovation that will change the way rough diamond trade is financed. Establishing diamonds as collateral for loans with Tradeflow will not only add to DMCC's complete portfolio of diamond trading products and services but also support increasing volumes of diamond trade through Dubai," said Gautam Sashittal, DMCC CEO.
“This unique offering provides an innovative mechanism for diamond traders to use their diamonds as collateral for funding their business growth needs,” said Peter Baltussen, Commercial Bank of Dubai CEO. “We see this as a catalyst for the development of the diamond industry in line with Dubai's position as a global diamond trading center and a hub for trade between the east and west."
The DMCC said local banks have expressed strong interest in Loans for Diamonds.
The Tradeflow platform allows commodity owners to store goods in rated warehouses. Upon request from the owners, the warehouses can issue electronic warrants that represent ownership of the stored goods. These Tradeflow Warrants can be used to pledge beneficial ownership or title transfer of the stored goods to financiers in return for working capital. By accepting the beneficial ownership of the underlying inventory, the financiers can reduce credit risk historically associated with commodity trade finance.