individuals, firms, companies in India against the collateral of fixed deposits held in non-resident account subject to certain conditions. In the present case, the fact is that in the absence of creation of any security out of the funds lent by the bank, these deposits in the NRNR account have to be treated as primary security by the bank whereby an indirect foreign exchange consideration in the form of acknowledgement of debt by the borrower in favour of the non-resident depositor was created without the permission of RBI. It was found that the borrower Shri Mukesh Jain had issued cheque dated 16.10.1997 for a sum of Rs. 11,56,500/- and cheque dated 16.07.1997 for a sum of Rs. 90,00,000/- in favour of Shri Prem Khanna and Smt. Naresh Khanna, a fact which is mentioned both in the show cause notice and the impugned order, and which has not been controverted with any evidence either at the initial stage or before me at the appellate stage. This is a clear act of placing an account to the credit of a non-resident Indian, because it has granted a right to the non-resident to pursue recovery. The RBI had during the relevant period, issued an instruction vide their letter dated 03.02.1998 addressed to the Manager of the appellant bank, Fort Branch Mumbai, which reads as under:
