India has given nine banks approval to open “vostro” accounts to help facilitate trade in rupees with Russia, federal trade secretary Sunil Barthwal said on Tuesday.
India wants to promote trade denominated in rupees, but the country has yet to see any international trade deals settled in its domestic currency.
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Of the nine approvals, three accounts have already been opened, the trade secretary said. Vostro accounts are accounts a bank holds on behalf of another, often foreign bank, and this forms a key part of correspondent banking.
Barthwal said Russia’s Gazprom had opened an account with UCO Bank, and VTB Bank and SberBank have opened accounts with their own India-based branch offices.
India’s central bank in July this year introduced a new mechanism for international trade settlements in rupees, aiming to promote exports and facilitate imports.
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The measure was seen as aiding business ties with Russia in case of more stringent Western sanctions against Moscow.
Russian banks have also opened six vostro accounts with India’s IndusInd Bank, Barthwal added.
