Discontinuing Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for Trade Credits

In case you don’t feel like reading, please click on the link to listen to the podcast.

https://drive.google.com/open?id=1SSJ2TFcDzKkL2B-XTVBrWXKbbgykvBS_

On a review of the prevailing guidelines on ‘External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency, it has been decided to discontinue the practice of issuing of LoUs and LoCs with immediate effect.

Letters of Credit and Bank Guarantees may continue to be issued as per prevailing guidelines.

The changes will be applicable from 13^th March 2018.

Based on RBI notification dated 13^th March 2018. In case you need further clarification, please visit www.rbi.org.in .................... Poppy