Reserve Bank of India (RBI) has discontinued the issuance of letters of undertaking (LoU) and letters of comfort (LoC) for trade credit by banks.

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Jewellery stocks have been the worst affected for a while now considering the exposure of scams. Either the stocks have been on suspension or trading negative as the investors are being cautious about the trading calls on these stocks. It has been expected that they may not be on the buying list for a long time.

Stating that the company has never used documentary credit in its business, Sanjeev Bhatia, CFO of PC Jeweller said, "PC Jeweller doesn’t import diamonds. We purchase cut and polished diamonds from within India."

"LoUs and LoCs were used more in loose diamonds", he added.

Bhatia also expected that the demand will bounce back during festive seasons and hoped that the investors will gain confidence.

First Published:Mar 14, 2018 4:57 AM IST