Rupee trade policy gains momentum
Rupee trade policy gains momentum

India's policy of facilitating trade in rupee is gathering tractionwith the total number of Special Rupee Vostro Account touching half a century mark in about six months.

As many as 49 accounts have been opened so far and some are awaiting regulatory approval, sources said. These accounts would facilitate overseas trade in rupee with eight countries -- Russia, Mauritius, Sri Lanka, Malaysia, Myanmar, Singapore, Israel and Germany.

The Reserve bank of India issued detailed guidelines on cross-border trade transactions in the domestic currency in July, 2022. Following the Russia-Ukraine war and the sanctions imposed by the West, India has been trying to promote rupee trade. Since July, Sberbank and VTB Bank -- the largest and secondlargest banks of Russia, respectively, are the first foreign lenders to receive approval after the RBI announced the guidelines.

Another Russian bank Gazprombank, which does not have its branch in India, has also opened this account with Kolkata-based UCO Bank. Other financial entities like SBI Mauritius Ltd and People's Bank of Sri Lanka opened an Rupee Vostro Account with State Bank of India (SBI). In addition, Bank of Ceylon opened an account in its Indian subsidiary in Chennai.

Union Bank of India has opened a special rupee account of Ros Bank Russia while Chennai-based Indian Bank has opened such accounts of three Sri Lankan banks, including Colombo-based NDB Bank and Seylan Bank.

Notably, The RBI, as per the guidelines, decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in the rupee.

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