AD Category - I banks are permitted to approve Clean Credit i.e. credit
given by a foreign supplier to its Indian customer, without any LC/LU/FD, for
import of Rough, Cut and Polished Diamonds, for a period not exceeding 180 days
from the date of shipment.
It has now been decided to delegate the
powers for permitting such clean credit exceeding 180 days to the AD banks,
subject to:
i) The
genuineness of the transaction and no payment of interest for the additional
period
ii)
The
reasons for such extension are due to financial difficulties or quality
disputes.
iii)
The
importer requesting for such extension is not under investigation.
iv)
The
importer seeking extension is not a frequent offender.
v)
AD
banks may allow such extension up to 180 days, beyond which they may refer the
cases to respective Regional Office of the Reserve Bank.
AD Category - I
banks should ensure that due diligence is undertaken and KYC Norms and AML
Standards are adhered to while undertaking import transactions. Any large or
abnormal increase in the volume of business should be closely examined. All
other instructions shall continue.
Based on RBI Circular dt
31/03/16. Please visit www.rbi.org.in for any further clarification
if required….. Poppy
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