Last year when the Reserve Bank of India(RBI) disclosed guidelines on cross-border trade transactions in the INR, the procedure of opening a Special Rupee Vostro Account (SRVA) started. SRVA is an account which domestic banks can maintain for foreign banks in the Indian rupees. This enables it to provide international banking services to cater global banking needs.
Now INR is marching towards becoming an international currency with around 18 countries agreeing to facilitate international trade in INR. According to Santosh Kumar Sarangi’s statement, who is the Director General of Foreign Trade (DGFT) some 18 nations have already opened Special Rupee Vostro Accounts with banks in India. About 30 banks from overseas have signed up with 30 Indian banks.
The central bank has given permission for opening 60 SRVA in those 18 countries. The list of countries included are Russia, Singapore, Sri Lanka, Botswana, Fiji, Germany, Guyana, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Tanzania, Uganda, Israel, Kenya and the United Kingdom, the first post reported.
As per the economic times report, some banks including UCO Bank and HDFC Bank have opened nearly 30 SRVA currently to ease overseas trade in INR.
Two largest banks of Russia, Sberbank and VTB Bank were the first overseas lenders to draw approval after the RBI issued guidelines on overseas trade in Indian currency. Even GazpromBank in Russia has opened this account with UCO Bank located in Kolkata.
RBI is aiming to promote cross-border trade in rupees, hence opening SRVA will help in settlement of payments in rupee rather than in dollar for trade between India and other countries.
By opening Special Rupee Vostro Accounts Indian banks will bond up with their foreign counterparts and as a result this will facilitate settlement of exports and imports in Indian rupee which will enhance the mechanism to settle international trade transactions in rupee.
