In earlier articles, we had seen that, banks are permitted by RBI to approve Suppliers’ and Buyers’ Credit (Trade Credit) including the usance period of Letters of Credit opened for Import of gold in any form including jewelery made of gold/ precious metal and or studded with diamonds /semi precious /precious stone not exceeding 90 days from the date of shipment.
RBI has further clarified with circular dated 20-02-2013, that Suppliers’ and Buyers’ Credit (Trade Credit) including the usance period of Letters of Credit opened for import of even precious stones and semi-precious stones should not exceed 90 days from the date of shipment. The revised directions will come into force with immediate effect.
Reasons for the above step taken by RBI
- Reduce Current Account Deficit.
- Discouraging importers using the above products solely for arbitrage.
- RBI Circular: Import of Precious Stones and Semi Precious Stones – RBI Clarification: Dated: 20-02-2013
- 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