RBI bans all Indian banks from issuing LoUs, LoCs

PNB fraud Nirav Modi allegedly managed to get 1,212 LoUs- which the RBI has discontinued now- in 74 months

The apex bank in its notification said,"It has been made a decision to discontinue the practice of issuance of LoUs/ LoCs for Trade Credits for imports into India by AD Category -I banks with immediate effect". Bankers say the scrapping of LoU/LoC is unlikely to impact trade credit as banks can issue Letters of Credit (LC) and Bank Guarantees for trade credits for imports.

The RBI has taken other fraud-control measures like bringing out a framework for dealing with loan frauds above Rs 50 crore, creating an online Central Fraud Registry, issuing caution advice detailing names of fraudsters and their modus operandi and ordering banks to re-verify the title deeds for all credit exposures above Rs 5 crore.

In today's plea before the special CBI court, the agency said it has filed another supplementary complaint about additional fraud of Rs 942 crore, taking the total amount of fraud to Rs 7,080 crore.


The RBI decision could potentially push up the cost of imports by up to half a percentage point, besides putting foreign banks on an even keel with Indian banks in financing imports, bankers said. "This is clearly a risk mitigating step as letter of credit are governed by Uniform Customs and Practice for Documentary Credits, which has a well defined set of rules and procedures", said a senior official at one of the public sector banks. They did not have any pre-approved credit limit either. "In the case of LCs for import of goods, banks should be very vigilant while making payment to the overseas suppliers on the basis of shipping documents".

The Finance Minister Arun Jaitley, on Tuesday, in a written reply to the Rajya Sabha revealed that Nirav Modi obtained his first fraudulent guarantee from PNB's Brady House branch in Mumbai on March 10, 2011 and managed to get 1,212 more such guarantees over the next 74 months, reported in PTI.

Related News:

  • BP Midstream Partners (NYSE:BPMP) Earns Media Sentiment Rating of 0.18

    It improved, as 17 investors sold EQM shares while 55 reduced holdings. 8 funds opened positions while 14 raised stakes. Another trade for 353 shares valued at $49,981 was bought by DiSimone Harry . (NYSE:HD) shares were sold by Carey Matt.
    CDC says missing doctor not passed over for promotion

    CDC says missing doctor not passed over for promotion

    O'Connor was sure Cunningham was upset over the lack of promotion because he allegedly shared the news with co-workers. Crime Stoppers said the money is for information "that points to criminal activity in the disappearance".

    Jose Mourinho hits back at Frank de Boer over Marcus Rashford

    The worry among United fans when Alexis Sanchez arrived from Arsenal at the end of January was that the signing could stunt Rashford's development.
  • Tottenham's Kane out until end of April

    Tottenham's Kane out until end of April

    The injury occurred after a collision with Bournemouth goalkeeper Asmir Begovic in the first half at Dean Court. England will face Tunisia, Belgium and Panama in the World Cup group stage in Russian Federation .
    Albert Wilson to sign three-year deal with Dolphins

    Albert Wilson to sign three-year deal with Dolphins

    In four seasons with the Chiefs he caught 124 passes for 1,544 yards, including 42 receptions for 554 yards past year . Reserve safety Walt Aikens is discussing re-signing with Miami, the person said, and is likely to reach a deal.
    Here's the first look of Sonam - Dulquer's 'Zoya Factor'!

    Here's the first look of Sonam - Dulquer's 'Zoya Factor'!

    The screenplay has been penned by Neha Rakesh Sharma, and the dialogues are written by Pradhuman Singh. Kerala's hit churning machine did a photo shoot with leading lady Sonam Kapoor to confirm the news.
  • FOX Chair Says Buffy the Vampire Slayer Could Get Revival

    FOX Chair Says Buffy the Vampire Slayer Could Get Revival

    And really, do we need more "Buffy"? But when we first brought it back it was Chris and David and Gillian. Newman didn't specify a reboot or a revival, but clarified that he wasn't announcing anything official.
    Shia LaBeouf blames Georgia arrest on 'white privilege'

    Shia LaBeouf blames Georgia arrest on 'white privilege'

    While the rest of the cast and crew didn't take issue with LaBeouf's behavior (at least, to his face), Gottsagen let him have it. They're a struggling motherf--er showing his ass in front of the world".
    Lead exposure increases risk for premature deaths & cardiovascular diseases

    Lead exposure increases risk for premature deaths & cardiovascular diseases

    People with high blood levels had a 70 percent greater risk of dying from cardiovascular disease than those with lower levels. After the median follow-up of 19.3 years, 4,422 people died-including 1,801 from CVD and 988 from heart disease .
  • Federer, Cilic, Del Potro advance in Indian Wells, Djokovic out

    Federer, Cilic, Del Potro advance in Indian Wells, Djokovic out

    He had surgery in Switzerland shortly after that. "And not to mention as well, I've played so many tournaments as a kid here. Yuki Bhambri of India pulled off a surprise when he toppled ninth-seeded Frenchman Lucas Pouille 6-4 6-4.
    Milder impact expected from next winter storm

    Milder impact expected from next winter storm

    The East Coast was previously hit with Winter Storm Riley , a storm that caused destructive winds , heavy snow and coast flooding. Winter-weary New England is gearing for yet another major storm that is expected to dump heavy snow starting Monday night.
    Katy Perry suffers wardrobe malfunction in 'American Idol' twerk battle

    Katy Perry suffers wardrobe malfunction in 'American Idol' twerk battle

    Katy , 33, who is a judge on the US TV talent show, got up on stage to dance with contestant Michelle Sussett during her try-out. What is "wig"?Plenty of viewers had that question after Noah Davis' audition, with the phrase trending on Google search.


Most liked

Dog dies on flight after owner told to put in overhead bin
Passengers reportedly heard the dog barking during the flight and found out that the dog died when the flight was over. Last August, Lulu, a King Charles spaniel , died in the cargo hold of a United Airlines jet.

Bengals bolster O-line in trade with Bills, move back in draft
If the teams finalize the deal by Sunday, the Bills will save $4.85 million against the 2018 cap, according to the Buffalo News . Many thought the Bengals may use their 12th overall pick on a tackle, or an offensive lineman of some sort at the very least.

Prosecutors will seek death penalty for Nikolas Cruz, Parkland shooting suspect
But this week he failed to follow up on plans to ban the sale of assault rifles, or the sale of any type of gun to those under 21. Borges' family has filed notice that they will sue Florida authorities to seek money to cover the cost of his recovery.

Malcolm Butler To Sign With Titans For Five Years, $61 Million
Butler spent the first four seasons of his career in New England, making the Pro Bowl once and winning two Super Bowls . Butler will join Logan Ryan as former Patriots cornerbacks to sign with the Titans in consecutive offseasons.

Nigeria negotiating for release of abducted schoolgirls
I think this is the best way to help the Nigerian government to get these girls released, which we hope will be done peacefully. We will also support opportunities to expand the economy, commercial investments, and peaceful polls in 2019, " he added.

Netflix's 'The Crown' Paid Claire Foy Less Than Co-Star Matt Smith
That was a bigger draw for me, at least, to see Foy take her turn as yet another British Queen. The Crown chronicles Queen Elizabeth II's accession to the present day.

Trudeau considering more action to keep foreign dumped steel out of Canada
Reacting to Trump's urge, Trudeau told CNN that Canada is glad to see the U.S. is eager to seal the deal. He was to also visit three Canadian steel cities this week to reassure workers.

Vikings QB Keenum to sign with Broncos
But by signing Keenum, they save money against the salary cap that will allow them to make fixes to some other areas of need. Elway said in recent weeks he still believed the team could get back into the postseason mix with an upgrade behind center.

Shaked: Both PM Netanyahu And DM Lieberman Can Prevent Elections
The Knesset plenum voted 59-38 in favor of the bill, which would exempt ultra-Orthodox seminary students from the military draft. Another secular party in the right-wing coalition, the economics-focused Kulanu, has also expressed trepidation over the bill.

Iraqi PM Agrees to Lift Ban on International Flights to Kurdistan Region
In a statement, al-Abadi's office said flights will be resumed to the Erbil and Sulaymaniyah airports after a six-month suspension.

Former Cuomo Aide Percoco Convicted On Corruption Charges
NY state is the most corrupt in the nation but certain members of the Legislature seem in no hurry to stomp it out. Percoco was acquitted of two extortion counts and one of the bribery charges he had faced.

Sealing drive: 1675 business establishments in Delhi sealed till Mar 9
Health Minister Satyendar Jain and Development Minister Gopal Rai were among others who attended the meeting on Tuesday afternoon. Following the sealing drive, traders had alleged that they were beaten up by the Delhi Police personnel deployed on the spot.

United States stocks rise ahead of inflation, retail sales data
Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 7, 2018. Broadcom gained 3.4 percent while shares in Qualcomm were flat.

College Student Receives "Special" Probation For Poisoning Roommate
Brouchu was charged with misdemeanor criminal mischief and breach of peace over the incident and was expelled from UH. He said Brochu wanted to apologize sooner, but he advised her not to because of a potential civil lawsuit.

Forest fire kills 10 hikers in Tamil Nadu
The Indian Air Force (IAF) was pressed into action by the Defence Minister after reports of the forest fire surfaced. Kurangani-Kozhukumalai hills in the Western Ghats are located near Bodinayakanur, about 40 kms from here.