Diamond Dollar Accounts (DDAs) are specialized current accounts denominated in US dollars, maintained with banks in India. These accounts are exclusively available to firms and companies engaged in the import and export of rough or cut and polished diamonds, coloured gemstones, and precious metal jewellery, whether plain, enameled (minakari), or studded with diamonds or other stones. DDAs are governed by the regulatory framework of the Reserve Bank of India (RBI) in alignment with the prevailing Foreign Trade Policy.
Eligibility Criteria
To be eligible to open a DDA, a firm or company must satisfy the following conditions:
- Be actively engaged in the diamond or jewellery trade involving imports and/or exports.
- Possess a verifiable track record of at least three years in such trade.
- Maintain an average annual turnover of ₹5 crore or more over the preceding three financial years.
Purpose
The primary objective of DDAs is to facilitate seamless foreign exchange management for eligible entities by allowing them to receive and retain export proceeds and make payments for imports directly in US dollars. This mechanism simplifies cross-border transactions and enhances operational efficiency in the diamond and jewellery sector.
Key Features
- Currency Denomination: Accounts are maintained in US dollars.
- Account Type: Non-interest-bearing current account.
- Account Limit: A maximum of five DDAs can be held by a single firm.
- Transfer Restrictions: Transfers between separate DDAs held by the same or different firms are restricted.
- Statutory Compliance: DDA balances are subject to regulatory provisions, including the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), as applicable.
Benefits
- Facilitates efficient handling of foreign exchange related to the diamond trade.
- Assists in managing currency exposure and hedging foreign exchange risks.
- Supports compliance with RBI guidelines and India’s Foreign Trade Policy.
- Enables timely and direct settlement of trade obligations in foreign currency.
Regulatory Oversight
DDAs are strictly regulated by the Reserve Bank of India to ensure adherence to India’s external trade policies and to monitor the flow of foreign exchange within the sensitive diamond and precious stones sector.
