Section 17(3A) in The Reserve Bank of India Act, 1934
(3A)the making to any scheduled bank or State co-operative bank, or loans and advances, against promissory notes or such bank, repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days:Provided that the borrowing bank furnishes a declaration in writing, to the effect that—(i)it holds bills of exchange arising out of any transaction relating to the export of goods from India of a value not less than the amount of such loans or advances,—(a)drawn in India and no any place in any country outside India which is a member of the International Monetary Fund or in any other country notified in this behalf by the Bank in the Gazette of India, and(b)maturing not later than one hundred and eighty days from the date of the loan or advance, and it will, so long as any part of such loans and advances remains unpaid, continue to hold such bills of exchange of a value not less than the amount of such loans or advances outstanding for the time being; or(ii)it has granted a pre-shipment loan or advance to an exporter or any other person in India in order to enable him to export goods from India, the amount of the loan or advance drawn and outstanding at any time being not less than the outstanding amount of the loan or advance obtained by the borrowing bank from the Bank.
