The union finance ministry will meet banks on December 5 to discuss international trade settlement in rupees, sources privy to the development told CNBC-TV18.
The meeting will include representatives of all public sector banks, representatives from the ministry of home affairs, the commerce ministry, and some private banks including IDBI, HDFC Bank, IndusInd Bank, ICICI Bank, Axis Bank, and Yes Bank, sources in the know told CNBC-TV18.
It is to be noted that the Reserve Bank of India (RBI) in July issued a detailed circular asking banks to put in place additional arrangements for export and import transactions in the rupee in view of the increasing interest of the global trading community in the domestic currency.
The RBI announcement to allow cross-border trade transactions in the rupee is a timely move and a step towards internationalisation of the currency.
Currently, a large part of bilateral trade between India and Russia is getting settled in the rupee due to sanctions imposed by the US and Europe following Moscow’s attack on Ukraine.
The RBI had said that for settlement of trade transactions, banks concerned will require special rupee vostro accounts of correspondent banks of the partner trading country.
“Indian importers undertaking imports through this mechanism shall make payment in INR 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,” it had said.
Exporters undertaking overseas shipments of goods and services through this mechanism will be paid the export proceeds in rupees from the balances in the designated special vostro account.
As per the circular, the rupee surplus balance held can be used for permissible capital and current account transactions in accordance with the mutual agreement.
