Reserve Bank of India eases norms for diamond imports

The Reserve Bank of India (RBI) on Thursday allowed banks to approve clean credit facility given by a foreign supplier to Indian importers of rough, cut and polished diamonds, even beyond 180 days.

RBI, in consultation with the Union government, has decided to delegate the powers for permitting clean credit for a period exceeding 180 days import of rough, cut and polished diamonds from the date of shipment to authorised dealers banks.

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These banks have to ensure that the reasons for such extension are due to financial difficulties and/or quality disputes, as in the case of normal imports. The importer seeking extension should not be a frequent offender.

Clean credit is a loan 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 importing diamonds.