In a notice, the Directorate General of Foreign Trade also said that the government will take all necessary action against banks that are complicit with exporters in issuing post-dated letters of credit, as it has been “apprehended that some of the exporters are asking to be registered”. certificates from RA (regional authorities) based on inappropriate documents and therefore more checks must be put into the system”.
“In cases where the LC date is 13th May or earlier but the date of prompt message/message exchange between Indian and foreign bank is later than 13th May, the RA may conduct a full investigation (if required, by through external experts) and if these are found to be backdated, immediate FT (D&R) law proceedings should be initiated against the exporter,” the DGFT said.
The government had banned wheat on May 13, but allowed exports against valid irrevocable letters of credit issued on or before that date as a transitional arrangement.
Later, he ordered to register LCs to ensure that only exporters with valid and genuine LCs get the final green light.
“These cases will be further investigated for referral to law enforcement agencies like EoW/CBI,” he said, adding that in cases of banker complicity where an antedate is established, the necessary procedures in accordance with the law will be initiated.
He also said that in order to fill in the gaps, the RAs of the management will carry out a physical verification of all LCs, whether they are already approved or in the process of being processed and roped in professional agencies, in addition to ensure validation or approval by beneficiary banks.
