Home / Latest News / Fallout of PNB Fraud: RBI bars issuance of Letter of Undertaking (LoU) with immediate effect

Fallout of PNB Fraud: RBI bars issuance of Letter of Undertaking (LoU) with immediate effect

March 13,2018:

RBI also barred issuance of the letters of comfort, but stated that letters of credit and bank guarantees can be continued to be issued if certain rules are met.

RBI
RBI

On Tuesday, Reserve Bank of India (RBI) ordered the commercial banks to stop issuing guarantees in the form of letters of undertaking (LoU) with immediate effect.

Issuance of the LoUs as a guarantee for credit, has come under fire since the instrument was grossly misused in perpetuating biggest Bank Fraud in recent history.

Instruments are all forms of trade finance which are often used by the importers to fund their overseas purchases.

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29th June, 2018, New Delhi

 

Venue : Vivekananda Institute of Professional Studies, AU- Block, Outer Ring Road, Pitampura, Delhi, 110034, (Nearest Metro Station Haiderpur or Pitampura), New Delhi, 110030.

 

Cost INR 999

 

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