New Delhi: India has been attempting to internationalise the rupee for a long. Nowadays, currencies like the US dollar, Euro, Japanese yen, British pound, and to a lesser extent, the Chinese yuan, can claim to be a global reserve currency. But, the latest report suggests that India has made tremendous progress towards giving the rupee this status.
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The latest report says that as more nations try to de-dollarize international trade, the Indian rupee is getting closer to becoming a recognised currency. The opening of 60 special rupee vostro accounts in 18 countries, including Russia and Sri Lanka, has been authorised by India’s central bank, the RBI, in order to facilitate the smooth operation of international trade in INR
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According to records, India’s Reserve Bank of India (RBI) had given permission to “domestic and foreign AD (Authorised Dealer) banks in 60 cases for opening SRVAs of banks from 18 nations” for the purpose of settling payments in Indian rupees, according to Bhagwat Karad, India’s Minister of State for Finance.
Out of the 18 nations, the minister added, Russia has been vocal in promoting local currency transactions as part of the larger “de-dollarization” movement. Yet, he continued, India has been promoting the idea of trade in local currency primarily to increase exports.
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List of countries allowed to trade in Indian rupees
– United Kingdom
– Malaysia
– Russia
– Singapore
– New Zealand
– Sri Lanka
– Myanmar
– Botswana
Israel
– Fiji
– Oman
– Germany
– Kenya
– Guyana
– Mauritius
– Seychelles
– Tanzania
– Uganda
What is Special Rupee Vostro Account (SRVA)?
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The SRVA process was initiated in July when the RBI published comprehensive guidelines for cross-border commercial transactions in Indian rupees (INR). The decision has been made to implement a new system for exports and imports that will allow for INR invoicing, payment, and settlement.
SRVA’s money transferrable to regular account
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Authorized banks in India must open and maintain SRVAs of the banks in the partner trading country in order to settle trade using the new procedure. The foreign entity’s holding in the Indian bank is kept in INR through these accounts. Amounts paid in rupees by an Indian importer to a foreign trader are credited to this vostro account.
Similar to this, money from this vostro account will be taken out and credited to the regular account of an Indian exporter when they are required to pay for products and services in rupees.
Holders of SRVAs are permitted to invest their excess funds in Indian government securities. The RBI is offering this opportunity to help spread awareness about the new system.
List of banks that receive RBI permission for SRVAs
Sberbank, VTB Bank, and Gazprombank, three of Russia’s top banks, were among the first to receive RBI permission for SRVAs.
