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Viram Domi, a toy manufacturer from India, found a raw material supplier from Singapore offering cheaper prices but requiring payment in dollars. With Indian rules limiting dollar purchases, he approached a bank for a solution to pay $1 million. The bank offered a loan at 13% interest or a Letter of Undertaking (L.O.U) for a foreign currency loan at lower rates. The L.O.U allowed payment to the supplier through the bank's branch in England.
