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Antwerp—Union Bank of India is closing its branch office in the diamond trading hub of Antwerp, Bloomberg reported late last week.

According to a report published Friday on Bloomberg.com, the bank opened its Antwerp office four years ago and pledged to put a fifth of its $200 million loan book toward diamonds in the first year.

Emails to Union Bank of India inquiring about its Antwerp branch went unreturned, but the news service quoted CEO Rajkiran Rai Gundyadka as saying the bank was shuttering its offices in Antwerp because the branch had not generated enough business.

Union Bank of India is the latest in a string of financial institutions to pull back from financing the diamond sector’s midstream, following the lead of Antwerp Diamond Bank, Standard Chartered and, most recently, ABN Amro. The lender announced to investors in May that it is closing its New York and Dubai diamond and jewelry lending offices.
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Indian banks, in particular, are under pressure to cut back on overseas lending following the $2 billion scam allegedly perpetrated against Punjab National Bank by diamantaire Nirav Modi and his uncle, Gitanjali Managing Director Mehul Choksi. Both men have denied any wrongdoing in the case.

Bloomberg described Union Bank of India’s exit as a “blow” to gem financing, though an unnamed official from the Antwerp World Diamond Centre pushed back on that description in a story published Monday by The Diamond Loupe, a jewelry news aggregation website launched by the AWDC.

The official told the site that the exit of the bank was neither an unexpected nor a significant loss for diamond financing in Antwerp. Union had a “limited lending portfolio” in the Belgian city, and most of the companies it services have alternative accounts elsewhere.

AWDC did not provide any further comment beyond what was shared with The Diamond Loupe.

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