Video: Why RBI has banned LoUs and LoCs, but not letters of credit

RBI has banned the issuance of letters of undertaking and letters of comfort to plug the loopholes in the system. Both these instruments were forms of credit guarantee, often used by importers to fund their overseas purchases. Watch BusinessToday.In Editor Rajeev Dubey talk about why RBI banned LoUs and LoCs, but decided to continue with the letters of credit (LCs) and bank guarantees.