Some banks have also started demanding more documents and told clients to submit papers two days in advance. Earlier, banks used to extend buyers’ credit against LoUs within a day. This pushed down the currency following which RBI intervened.“Importers are facing difficulties to avail trade finance amid heightened vigilance,” said Anindya Banerjee, currency analyst, Kotak Securities. This squeezes their liquidity position, Dey said.“Indian banks are hesitant to extend such shorter-term credit overseas after PNB fraud . Banks are seeking a whole lot of documents from clients with whom they have been dealing with over the years.

Source: Economic Times February 22, 2018 01:07 UTC