PNB, others argue over RBI rules on credit facilities for import of pearls
A
grey area in the Reserve
Bank of India (RBI)
guidelines on credit facilities for import of pearls has
led to a conflict between public sector banks embroiled
in the Rs 114-billion scandal related to fake issuance of Letters of
Undertaking (LoUs) by Punjab
National Bank.ALSO
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scam: Firestar's Vipul Ambani created disproportionate assets, says
CBIThere
are nothing specific on availing of credit facility for trade of
pearls, bankers note.
The
group of companies belonging to Nirav
Modi and Mehul
Choksi had
sought loans for import of
new pearls, PNB has told the investigative agencies.ALSO
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can dip to 30,000; PNB scam dents investors' confidence: Marc
Faber“If
you go back and look at old circulars issued by RBI, it used to refer
to pearls separately.
But, somewhere down the line, it seems the regulator removed it,
creating ambiguity among bankers,” a senior executive said.
Adding
that the ministry of commerce and industry had also classified
‘pearls’ as a separate trade product.Government-owned PNB has
said that it will meet only the genuine liabilities, indicating
other banks might
have to share the burden.
It
feels the foreign branches of the other banks did
not do the needed due-diligence before depositing money into PNB’s
overseas accounts, then transferred to the supplier companies of
the Nirav
Modi and Mehul
Choksi groups.PNB
had said in its complaint to the Central
Bureau of Investigation (CBI)
that RBI prescribed credit for import of
semi-precious and precious stones up to 90 days but the credit
allowed in most cases was for about 360 days.
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