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Import of Rough, Cut and Polished Diamonds
Presently, banks can approve Clean Credit i.e. credit given by a foreign supplier to its Indian customer / buyer, without any Letter of Credit (Suppliers’ Credit) / Letter of Undertaking (Buyers’ Credit) / Fixed Deposits from any Indian financial institution for import of Rough, Cut and Polished Diamonds, for a period not exceeding 180 days from the date of shipment.
This circular permits banks, with immediate effect, to approve clean credit for a period exceeding 180 days from the date of shipment, subject to the following conditions: –
i) Banks must be satisfied about the genuineness of the reason and bonafides of the transaction and also that no payment of interest is involved for the additional period.
ii) The extension must be due to financial difficulties and / or quality disputes, as in the case of normal imports (for which such extension of time period for delayed payments has already been delegated to the AD banks).
iii) The importer requesting for such extension must not be under investigation / no investigation must be pending against the importer.
iv) The importer seeking extension must not be a frequent offender. Since there is a possibility that the importer may have dealings with more than one bank, the bank allowing extension must devise a mechanism based on their commercial judgement, to ensure this.
v) Banks can allow such extension of time up to a maximum period of 180 days beyond the prescribed period / due date, beyond which they must refer the case to respective Regional Office of RBI.
Banks must submit, customer-wise, a half yearly report of such extensions allowed, to the respective Regional Office of RBI.
