Context:
The Reserve Bank of India has amended the procedure for opening Special Rupee Vostro Accounts (SRVAs), aiming to promote trade settlement in INR and ease compliance for banks.
Key Highlights:
- RBI has eliminated the requirement for prior approval to open SRVAs.
- Authorised Dealer (AD) banks can now open SRVAs for foreign correspondent banks without seeking RBI’s permission.
- This move is part of India’s strategy to promote rupee-based international trade settlements.
About Special Rupee Vostro Accounts (SRVAs)
- SRVAs are INR-denominated accounts held by overseas banks with Indian AD banks.
- These accounts facilitate invoicing, payment, and settlement of exports/imports in Indian Rupees.
- Introduced as part of the RBI’s 2022 framework for international trade settlement in INR.
Significance
- Enhances ease of doing business in cross-border trade.
- Boosts internationalisation of the Indian Rupee.
- Strengthens India’s bilateral trade relationships, especially with nations facing dollar liquidity issues.
