Mumbai, Aug 28 (UNI) The Reserve Bank of India today restricted isuance period of letter of credit for import of some precious metals to 90 days from the date of shipment as against the normal one year with immediate effect In a notification here, the Apex bank said in the context of recent developments and it has been decided that Suppliers' and Buyers' credit, including the usuance period of Letters of Credit opened for import of Platinum, Palladium, Rhodium and Silver should not exceed 90 days from the date of shipment.
All Authorised Dealer Category I banks have been permitted to approve Suppliers' and Buyers' credit (trade credit) up to USD 20 million per import transaction for imports permissible under the Foreign Trade Policy of the DGFT with a maturity period up to one year from the date of shipment (three years in the case of capital goods).
RBI said AD Category I banks should ensure that due diligence is undertaken and Know-Your-Customer (KYC) norms and Anti-Money Laundering (AML) guidelines, issued by the Reserve Bank are adhered to while undertaking import of these metals. Further, any large or abnormal increase in the volume of business should be closely examined to ensure that the transactions are bonafide and are not intended for interest / currency arbitrage. All other instructions relating to import of these metals shall continue. The directions have been issued under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999).
UNI VK OBB SKB1956