Centre Directs Banks to Expedite Rupee Vostro Accounts


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To encourage cross-border trade in rupees rather than the US dollar, the Centre has instructed banks to expedite the process of opening special rupee vostro accounts (SRVA) of correspondent banks of partner trading countries.

Additionally, it has requested that the department of commerce develop rupee trade agreements with trading partners and speak to exporters and importers about making payments using SRV accounts. The centre recommended allowing export receivables to be offset against import payables and providing bank guarantees for business transactions.

The step will eliminate the requirement for settlement through convertible currency, lower transaction costs, and decrease foreign exchange risk for exporters and importers, according to a thorough recommendation shared with relevant ministries.

On Wednesday, the finance ministry conducted a meeting with representatives from the Reserve Bank, the minister of trade and industry, and the ministry of external affairs. Sanjay Malhotra, secretary, Department of Financial Service, served as the meeting’s chair.

Officials with knowledge of the negotiations claimed that the action will relieve rupee pressure and significantly aid partner nations experiencing balance of payment problems.

Amounts in the designated Special Vostro account of the correspondent bank of the partner country shall be used to pay Indian exporters who export products and services the export revenues in Indian Rupee.

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