Home News Reports PNB-Nirav Modi Scam Impact: RBI Discontinues LoUs for Trade credit

PNB-Nirav Modi Scam Impact: RBI Discontinues LoUs for Trade credit

In the continuing aftermath of the PNB Nirav Modi scam, RBI today announced that it had scrapped Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for Trade Credits. The RBI has said that on review of the guidelines in force for the use of LoUs and LoCs, it has decided to discontinue the practice of issuance of LoUs/ LoCs for Trade Credits for imports into India by AD Category –I banks with immediate effect.

The notification further mentions that while Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) have been discontinued, Letters of Credit and Bank Guarantees for Trade Credits for imports into India may continue to be issued subject to compliance with the provisions existing in the RBI circulars.

- Ad - - article resumes -

It may be noted that the genesis of the PNB Nirav Modi scam was in the fraudulent  Letters of Undertaking (LoUs)  issued by the Indian branch of PNB at Mumbai, which were relied upon by foreign bank branches, to extend credit facilities to firms owned by Nirav Modi.

This move by RBI may impact many businesses but it seems to be a calculated move taken in order to minimise damage through fraudulent or incorrect LoUs.

Help Opindia Reach Every Indian. Share This Post
We need your support to survive in the media industry. Please consider paying us for the content we produce:

To know more about these payments, please click here.


Big Story

After abrogation of Article 370 by the Modi government, Congress and Pakistan seem to have found an ideological soulmate in each other

2019 World Cup Is Here!

Catch the latest on Cricket World Cup as it unfolds, special coverage by Opindia

To Advertise on Opindia.com Click here

Barkha Dutt’s strange coincidences with a Kashmiri who wished death upon PM Modi and Amit Shah

Idrees ul Haq, with whom Barkha Dutt had a series of ‘coincidences’ is a known separatist sympathiser
Actor R Madhavan was trolled on social media by many 'liberals' as he had posted the pictures of himself and his son wearing the Yajnopaveetham

Actor R Madhavan hounded on social media for sharing pictures of himself wearing the Poonal or Yajnopaveetham

Madhavan posted pictures of himself with his son wearing the Poonal or Yajnopaveetham, the sacred thread of Brahmins.

Imran Khan’s Twitter meltdown continues as international community ignores his rants

For all his theatrics, Imran Khan appears to be screaming into the void.

Deplorable ‘journalists’ further Pakistan propaganda and undermine India: Why should their patriotism not be questioned

Indian 'journalists' and 'intellectuals' have taken up the mantle of peddling the Pakistan narrative on Kashmir it appears.

Here is why Shobhaa De could be first in a long list to be exposed by Pakistan

India’s stand on abrogation of Article 370 and 35A and dilution of Jammu and Kashmir from a state to a Union Territory has dropped the baby of pretence.
Pakistan finance minister Assad Umar writes to FATF to remove India from its co-chair

I am an Indian, a Christian, and I live in India without fear: An open letter to Pakistan PM Imran Khan

"Don’t ever drag an Indian-Christian into your false propaganda. You don’t know our love for #BharatMata", says Savio Rodrigues, Editor-in-chief, Goa Chronicle
Shah Faesal was reportedly planning to approach ICJ over India’s decision to abrogate Article 370

IAS-turned-politician Shah Faesal was travelling to file case against India in the ICJ over Kashmir issue: Report

Shah Faesal was nabbed at the New Delhi International Airport on August 14 when he was trying to leave the country, reportedly, to Turkey

After the abrogation of Article 370, Pakistan Minister expresses angst over Rahul Gandhi not winning 2019 elections

After abrogation of Article 370 by the Modi government, Congress and Pakistan seem to have found an ideological soulmate in each other

Purported email screenshots of Kavita Krishnan’s team show them discussing use of retired judges and ex-military officers for Kashmir propaganda

Purported screenshots of internal emails of urban naxals are being circulated on social media
PM Modi's debut on Man vs Wild becomes most viewed show worldwide with 3.6 billion impressions, leaving Super Bowl behind

PM Modi’s debut on Man vs Wild becomes most trending show worldwide with 3.6 billion impressions, leaving Super Bowl behind

The appearance of PM Modi on Discovery’s ‘Man vs Wild’ show with survivalist and adventurer Bear Grylls has garnered 3.6 billion impressions and counting.
Subscribe to Day's Top Stories
[newsletter_form type="minimal"]
- Advertisment -

Latest articles

Connect with us

180,547FansLike
169,841FollowersFollow
88,838SubscribersSubscribe
Help Opindia Reach Every Indian. Share This Post