In earlier articles on Buyers Credit on Import of Gold and Import of Platinum, Palladium, Rhodium, Silver, as stated, Reserve Bank of India (RBI) had permitted banks to approve Suppliers and Buyers Credit (Trade Credit) including the usance period of Letters of Credit for import of rough, cut and polished diamonds, for a period not exceeding 90 days, from the date of shipment.
But there still remained an ambiguity on maximum tenure allowed on imported jewellery as circulars were silent on the same. Because of this ambiguity, few LOU Issuing banks were issuing lou / loc (Letter of Undertaking / Letter of Comfort) for 360 days tenure and thus importers were enjoying buyers credit upto 360 days tenure.
RBI issued a clarification circular on the above matter. RBI has clarified that Suppliers’ and Buyers’ credit (Trade Credit) including the usance period of Letters of Credit opened for import of gold in any form including jewellery made of gold/precious metals or/ and studded with diamonds/ semi precious / precious stones should not exceed 90 days, from the date of shipment.
- RBI Circular : Fema 1999 – Import of Gold in any form including Jewellery – Clarification: Dated: 24-09-2012
- RBI Master Circular on External Commercial Borrowing (ECB) and Trade Credit: Dated: 01-07-2014
- RBI Master Circular on Import of Goods and Services: Dated: 01-07-2014
- RBI Circular for Buyers Credit and Suppliers related to of import of Rough, Cut and Polished diamond: Dated: 06-05-2011
- RBI Circular for Import of Platinum, Palladium, rhodium, and Silver: Dated: 28-01-2008