The global economic slowdown has forced Surat diamond traders to give up their traditional methods of doing business.

Faced with a liquidity crunch and defaults in payment, the Surat Diamond Association (SDA), in a recent meeting, asked its members to do business in cash only and forego the credit system of transaction, which was based on trust and relationship.

During the slowdown, defaulters have augmented the problems of many traders, who deal in rough and polished diamonds.

Mohan Vekaria, a Mahidharpura-based diamond trader, said: “We have decided to play it safe now. We want our money to be safe. Recession has taught us a lesson.”

During a meeting of diamond traders called by the SDA a few days ago, it was decided to adopt a ‘cash only’ system.

Vekaria said even brokers who play an important role in this industry have been taken into confidence.

Traders point out that many took advantage of the credit-based payment system and resorted to evading payment of large amounts.

The credit period in this business is usually 45 days.

Diamond manufacturer Chandu Setha said: “The industry has just recovered from the slowdown and the traders have become cautious. They have adopted cash system in place of the credit system. It will frustrate those who are in this business for quick money.”

Surat Diamond Association president Rohit Mehta said: “The recession has taught a good lesson to everybody. The traders approached the association to consider ‘only cash’ system instead of the prevailing credit system. In view of the financial commitments of the diamond traders, we have decided to adopt this system. In fact, this decision should have been taken much earlier.”