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

Mar 14, 2018 | by Avantis RegTech Legal Research Team

The Reserve Bank of India (RBI) vide circular dated March 13, 2018 has decided to discontinue the practice of issuance of LoU’s/ LoC’s for Trade Credits for imports into India by AD Category –I banks with immediate effect.

 Letters of Credit and Bank Guarantees for Trade Credits for imports into India may continue to be issued subject to compliance with the provisions of Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015 on “Guarantees and Co-acceptances”

 AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.

[RBI/2017-18/139 A.P. (DIR Series) Circular No. 20]

URL: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI139F15274F2540046CE9C14E9DFEAA60941.PDF


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