India has been trying to promote the use of INR for trade settlement with other countries after the West and European nations imposed sanctions following the launch “special military operation” by Russian President Vladimir Putin against Ukraine on 24 February, 2022. “Indian importers undertaking imports through this mechanism shall make payment in INR (Indian Rupee), which shall be credited into the special vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller/supplier,” the Indian central bank had said. ![]() This facility is being provided by the RBI to help popularise the new arrangement.ĭon’t Miss: Indian rupee could be the new dollar, says ‘Doctor Doom’ Nouriel Roubini The SRVAs holders are allowed to invest surplus balance in Indian government securities. Similarly, when an Indian exporter has to be paid for goods and services in rupees, amount from this vostro account will be deducted and credited to the exporter’s regular account. When an Indian importer make a payment to a foreign trader in rupees, the amount gets credited to this vostro account. These accounts keep the foreign entity’s holding in the Indian bank in INR. To settle trade as per the new mechanism, authorised banks in India need to open and maintain SRVAs of the partner trading country’s banks. “It has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR,” the India’s central bank said.Īlso Read: Eight countries open 50 special rupee vostro accounts in 6 months to trade in INR ![]() ![]() ![]() The process of SRVAs started last year in the month of July when the RBI issued detailed guidelines on cross-border trade transactions in the Indian rupees (INR). What is Special Rupee Vostro Account or SRVA? The numbers clearly indicate a significant progress in the development of mechanism to settle international trade in Indian rupees.
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