RBI/2010-11/514
A.P. (DIR Series) Circular No. 59
May 06, 2011
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Foreign Exchange Management Act, 1999 –
Import of rough, cut and polished diamonds
Attention of Authorised Dealer Category – I (AD Category – I) banks is invited
to the
A.P.(DIR Series) Circular No.12 dated August 28 ,2008, in terms of which
AD Category – I banks were permitted to approve Suppliers’ and Buyers’ credit
(trade credit), including the usance period of Letters of Credit for import of
platinum, palladium, rhodium and silver for a period not exceeding 90 days from
the date of shipment .
- In the context of recent developments, it has been decided that Suppliers’
and Buyers’ credit (trade credit) including the usance period of Letters of
Credit opened for import of rough, cut and polished diamonds should not exceed
90 days from the date of shipment. The revised directions will come into force
with immediate effect.
- AD Category – I banks should ensure that due diligence is undertaken and
Know-Your-Customer (KYC) norms and Anti-Money Laundering (AML) standards, issued
by the Reserve Bank are adhered to while undertaking the import transactions.
Further, any large or abnormal increase in the volume of business should be
closely examined to ensure that the transactions are bonafide and are not
intended for interest/currency arbitrage. All other instructions relating to
imports of rough, cut and polished diamonds shall continue.
- The earlier instructions issued for direct import of gold vide
A.P.(DIR
Series) Circular No.2 dated July 9,2004, import of platinum / palladium/ rhodium
/silver vide
A.P.(DIR Series) Circular No.12 dated August 28,2008 and advance
remittance for import of rough diamonds, vide
A.P.(DIR Series) Circular No. 21
dated December 29,2009 shall remain unchanged.
- AD Category – I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- The directions contained in this circular have been issued under Section 10
(4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42
of 1999) and are without prejudice to permissions / approvals, if any, required
under any other law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager in-Charge