TWO major European banks -- Antwerp Diamond Bank (ADB) and ABN Amro -- have refused to conduct any diamond transactions with Zimbabwe, reports said Monday.

The banks' decision became public at the second day of the Mines to Market international diamond industry conference in Mumbai, India, which Zimbabwe's Mines Minister Obert Mpofu attended.

Both banks said that their decision was prompted by concern for their reputations in light of ongoing controversy surrounding alleged human rights abuses in Zimbabwe's diamond fields.

Controversially, they also cited European Union sanctions on the country which the EU has been desperate to project as not financially prejudicial to Zimbabwe’s economy but “targeted” at President Robert Mugabe and over 100 his senior officials accused of human rights abuses.

An international embargo on Zimbabwe diamonds is in place, although in September the Kimberley Process allowed the country to export two small parcels of diamonds provided it allowed full access to diamond mining sites by its monitors.

ADB Executive Committee Chairman Pierre de Bosscher stated that Zimbabwe's "ethical standards must improve" and that his institution would not deal with the country so long as it remained under European sanctions.

De Bosscher stressed that his bank would also avoid indirect diamond transactions, stressing that such a course of action hurt the transparency of the diamond industry.