The Reserve Bank tightened norms for import of precious and semi-precious stones by imposing a limit of 90 days towards letter of credit.

"It is clarified that Suppliers' and Buyers' Credit (trade credit) including the usance period of Letters of Credit opened for import ofprecious stones and semi-precious stones should not exceed 90 days from the date of shipment," RBI said in a notification.

A letter of credit is issued by a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.

As per the extant rules, banks have been permitted to approve Suppliers' and Buyers' Credit or the trade credit including the usance period of Letters of Credit opened for import of gold in any form for a period not exceeding 90 days from the date of shipment.

This is also applicable for jewellery made of gold or precious metal or any studded with diamond or semi-precious or precious stone.

RBI said the revised directions will come to force with immediate effect. (PTI)