Section 17(12B) in The Reserve Bank of India Act, 1934
(12B)the making of loans and advances in foreign currencies to scheduled banks, the Exim Bank, or the Reconstruction Bank or the Small Industries Bank the Industrial Finance Corporation, any State Financial Corporation and any other financial institution as may, on the recommendation of the Bank, be approved by the Central Government and on such terms and conditions as may be specified by the Central Board in this behalf, against promissory notes of such bank or financial institution, as the case may be:Provided that the borrowing bank or financial institution, as the case may be, furnishes a declaration in writing to the effect that—(a)it has made loans and advances in foreign currencies for financing international trade or for the import of capital goods or for such other purposes as may be approved by the Central Government; and(b)that the amount of loans or advances so made and outstanding at any time will not be less than the outstanding amount of the loans or advances obtained by it from the Bank;
