What changed
RBI will no longer maintain a list of approved overseas mining companies for advance remittances for rough diamond imports. AD Category-I banks are now empowered to approve such transactions without any limit or bank guarantee, subject to conditions.
What it means for you
Banks gain greater autonomy in facilitating rough diamond imports, reducing RBI's direct oversight. This liberalization speeds up trade but shifts compliance burden to banks, who must ensure GJEPC recommendation, importer track record, and KYC norms are met. Reporting thresholds for large remittances remain.
What you must do
- Update internal policies to allow advance remittances for rough diamonds without RBI approval, using GJEPC recommendations.
- Conduct thorough due diligence on importers, verifying their status as recognized processors and good track record.
- Ensure remittances are made directly to the ultimate beneficiary and not through numbered accounts.
- Submit half-yearly reports to RBI Regional Office for remittances of USD 5 million or more within 15 days of half-year end.
- For public sector importers, require a Ministry of Finance waiver for bank guarantee if advance exceeds USD 100,000.
Who it affects
AD Category-I banks, Importers of rough diamonds (non-PSC entities), Gems and Jewellery Export Promotion Council (GJEPC), Public sector companies and government departments importing rough diamonds
What is the key change for banks regarding rough diamond imports?
Banks no longer need to refer to an RBI-approved list of mining companies. They can now approve advance remittances without limit or bank guarantee, using their commercial judgment and GJEPC recommendations.
What conditions must banks verify before allowing advance remittance?
Banks must ensure the overseas mining company has GJEPC recommendation, the importer is a recognized processor with good track record, the transaction is bonafide, and remittance is made directly to the beneficiary. KYC and anti-conflict diamond checks are mandatory.
Are there any reporting requirements for large remittances?
Yes, banks must report all advance remittances of USD 5 million or more to the concerned RBI Regional Office within 15 calendar days of each half-year end, using the prescribed format.