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The Reserve Bank of India (RBI) has permitted banks from 18 countries to open Special Vostro Rupee Accounts (SVRAs) to settle payments in rupees, the government said. Speaking in Rajya Sabha, Union Minister of State for Finance Bhagwat Kishanrao Karad said that 60 such approvals have been given by the RBI.
These 18 nations include Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom.
SVRAs could be set up by the banks by approaching the Authorised Dealer (AD) banks in India and it may then get permission from the RBI after completion of the due process. The SVA process began in 2022 when RBI announced, “it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR [Indian rupees].”
Karad also said that Russia has been vocal in using the Indian rupee for trade and for “de-dollarisation”
“Procedures for trade in INR have been delineated by RBI in the Circular (No 10 RBI/2022-2023/90 dated 11.07.2022 on ‘International Trade Settlement in Indian rupees’. RBI has also issued FAQs on its website. RBI has clarified matters related to the operationalisation of SRVAs through the said FAQs, which are available to banks, importers and exporters etc,” Karad added.
SVRAs are used to keep the foreign company’s holdings in the Indian bank in the form of the Indian rupee.
When an Indian importer makes a payment to a foreign trader in rupees, the amount gets credited to this vostro account. Similarly, when an Indian exporter needs to be paid for his goods and services in rupees, money will get deducted from this account. It will then be credited to the exporter’s regular account.
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