RBI/2014-15/119
A.P. (DIR Series) Circular No.2
July 7, 2014
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.59 dated May 6, 2011, 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 Rough, Cut and Polished Diamonds for a period not exceeding 90 days
from the date of shipment.
- Taking into consideration the representations received from the diamond
importers and the GJEPC, it has been decided, in consultation with the
Government of India, that the 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, may
be permitted for a period not exceeding 180 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. All other
instructions relating to imports of Rough, Cut and Polished Diamonds shall
continue.
- 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
(C.D. Srinivasan)
Chief General Manager