ANNOUNCEMENT 13 Mar 2018
The Indian central bank has discontinued issuance of letters of undertaking and comfort for import trade credit purposes.
NUMBER OF INTERVENTIONS
RBI/2017-18/139 A.P. (DIR Series) Circular No. 20
On 13 March 2018, the Reserve Bank of India through RBI/2017-18/139 A.P. (DIR Series) Circular No. 20 disallowed issuance of Letter of Undertaking and Letter of Comforts by dealer banks for trade credits for imports into India. Henceforth, only Letters of Credit and Bank guarantees for Trade credits may be issued for the same.