In what seems like a direct fallout of the multi-crore PNB scam involving jewellers Nirav Modi and Mehul Choksi, the Reserve Bank of India (RBI) discontinued issuance of Letter of Understanding (LoUs) by banks for trade credits for imports into India. In a statement, the central bank said that the move will come into effect immediately. LoUs are bank guarantees under which a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of short-term credit.  

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