CBI probing central bank guidelines on letter of undertakings tenure

The RBI guidelines on validity of LoUs for the gems and jewellery sector is a bone of contention for bankers involved in the Rs 127-billion scam reported by PNB

The Central Bureau of Investigation (CBI) is in a dilemma over determining the validity of letters of undertaking (LoUs) issued by Punjab National Bank (PNB) in the Rs 127-billion scam, allegedly involving the Nirav Modi and Mehul Choksi groups of companies. This, though, the Reserve Bank of India (RBI) has banned the issuance of such guarantees for importers.
 
Finance Minister Arun Jaitley could not offer clarity to a query posed by Lok Sabha MPs on whether the tenure for LoUs issued for the gems and jewellery industry was valid for 90 days or 364 days — seen by bankers