The financial dispute between Canara Bank and Rajesh Exports Ltd has garnered attention due to an outstanding exposure of around ₹509 crore linked to letters of credit (LCs) issued for gold imports. Canara Bank facilitated these LCs, which allowed Rajesh Exports to import gold while promising to reimburse the bank later. However, when repayments ceased in 2020, the bank was left with the liability, as payments had been made to Valcambi SA, a Swiss subsidiary of Rajesh Exports. This structure raised concerns as funds were transferred to an overseas entity before the Indian parent company could secure repayment. The Debt Recovery Tribunal ruled that the obligations from these LCs must be honored, despite Rajesh Exports' claims that losses were due to foreign exchange fluctuations. The case is further complicated by an ongoing investigation from the Securities and Exchange Board of India (Sebi), which is examining potential misrepresentation of revenues and fund diversions involving Rajesh Exports' overseas subsidiaries. The bank has initiated recovery proceedings and is looking to sell the exposure, although it claims to have provisions in place to mitigate financial impact.