A growing number of countries have reportedly opened Indian currency accounts to boost trade
Eight more countries have opened Special Rupee Vostro Accounts (SRVA) aimed at facilitating cross-border trade settlements in the Indian currency, news website Firstpost reported on Tuesday.
A vostro account is commonly opened at a domestic bank on behalf of a foreign bank in the former’s domestic currency, in this case, the rupee.
So far, 49 vostro accounts have been opened with countries including Russia, Sri Lanka, Mauritius, Malaysia, Singapore, Myanmar, Israel and Germany.
Detailed guidelines on international trade transactions in the Indian rupee were released by the Reserve Bank of India (RBI) in July, as New Delhi seeks to promote the use of domestic currency for settlements with other countries, after the imposition of anti-Russia sanctions.
SRVAs allow holders to invest the surplus balance in Indian government securities. International trade settlements using the Indian rupee are an additional arrangement to the existing system, which uses freely convertible currencies. Unlike other rupee vostro accounts, SRVAs require official approval before opening.
In October, Russia’s second biggest lender, VTB, said it had opened a Special Rupee Vostro Account at its Indian branch, to enable the more active use of Indian rupees in payments under import and export contracts between the two nations. Meanwhile, Russian banking giant Sber has begun offering its clientele SRVA accounts, aiming to facilitate rupee-denominated trade transactions, which are increasing due to Western sanctions.
This article was originally published by RT.