RBI has asked for details of LoUs issued as far back 2011, and the deadline for banks to respond was earlier this week. RBI is ratcheting up pressure on banks, increasing its scrutiny and laying down deadlines for them to fix gaps in their systems, in the aftermath of the country’s biggest bank fraud. One of the people said RBI had asked for details of LoUs issued as far back 2011, while another said the deadline for banks to respond was earlier this week. Importers typically use LoUs issued by their local bank to raise cheaper foreign currency loans overseas to fund purchases. The bank has also said the employees intentionally did not enter the LoUs in the bank’s core accounting system to prevent the alleged fraud from being detected.

Source: Mint March 09, 2018 15:22 UTC