Battle of the Bourses: Surat Urges Members to Close Mumbai Offices
July 06, 23
(IDEX Online) - The new Surat Diamond Bourse (SDB) is facing criticism for offering incentives to new members if they close their offices at the Bharat Diamond Bourse (BDB), in Mumbai.
The new trading hub, built at a cost of $355m, is finally due to open this November after almost four years of delays.
But is has provoked anger by urging SDB traders who also operate from BDB to close their office there.
They will then qualify for up to a year's free maintenance - and have their name on a board of honor.
"Members who will completely discontinue its business from Mumbai office and start their business in Surat Diamond Bourse can avail the benefit of relaxation in maintenance charges," SDB says in a letter to its members dated 27 May and signed Managing Committee SDB Diamond Bourse.
It outlines the incentives being offered, including honorable mentions as "Leading Members to start Diamond trading activity in Surat Diamond Bourse".
And it concludes: "We hope that you will take the advantage of this scheme announced by SDB and close your Mumbai office and start the sell of Polish Diamond from Surat Diamond Bourse only."
Mehul Shah, vice president of BDB, which was founded in 2010, has 6,000 members, and is currently the world's largest diamond bourse, said the initiative was "not in good taste".
He told IDEX Online: "There are around 10,000 (diamond) offices all around Surat. They should focus first on people there to open an office at SDB rather than calling the people from Bombay.
"This is not the first time they have done this. Senior people spoke to them and told them this is not good for the interests of the industry. Do not divide the industry, do not divide the community."
He said SDB may be losing confidence, with 4,300 offices to fill in the vast office complex of nine 15-story towers. "It is easy to make a bourse, but to get people shifted is not easy," he said.
SDB did not respond to our requests for comment.
However Dinesh Navadia, a member of SDB's managing committee, told Times of India: "This scheme is for members of the SDB. Not for anyone else.
"We have decided to offer them some relaxation in maintenance. There is nothing wrong in our committee decision as we want business houses to advantage of this offer and move."
Surat has long been the capital of diamond manufacturing, handling over 90 per cent of all the world's gems, but the trade has been centered in Mumbai, a five-hour drive away.
SDB will be the world's largest office building, covering a site larger than The Pentagon in the USA. It is due to be officially opened by India's prime minister Narendra Modi in December or January.
Pic courtesy SDB shows part of the new bourse