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Viram Domi, a toy manufacturer in India, finds a cheaper raw material supplier from Singapore who requires payment in dollars. Since Indian regulations limit annual dollar purchases to $250,000, he seeks a solution from the bank to facilitate a $1 million payment. The bank offers a loan at a 13% interest rate, converting it to dollars and facilitating the payment, but Domi finds this option too costly. The bank then suggests issuing a Letter of Undertaking (L.O.U.), which would allow him to obtain foreign currency loans at lower interest rates, enabling the payment to the supplier without breaching local currency regulations.