In early February, Punjab National Bank informed India's stock exchanges of a significant alleged fraud involving transactions dating back to 2011.
It appears that a number of bank employees, based in a branch in Mumbai, allegedly issued letters of undertakings (LoU's) that enabled certain companies to raise money from international branches of other Indian banks in the form of buyer's credit. The PNB press release stated that: "these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions."
A useful summary of the circumstances can be found here - http://www.livemint.com/Companies/7zQvBwuOrZh88hxwvC309J/PNB-fraud-How-Nirav-Modi-pulled-off-the-great-Indian-bank-r.html
As a result, the Reserve Bank of India, pursuant to a review of the extant guidelines, has decided to discontinue the practice of issuance of LoU's for Trade Credits for imports into India.
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11227&Mode=0