The Indian government on Tuesday announced the approval for banks from 22 partner nations,&nbsp;including Russia and the United Kingdom, to establish "vostro" accounts within India. This move aims to enhance the rupee trade by facilitating international banking services for clients with global banking needs.

A "vostro" account is an account held by domestic banks for foreign banks in the local currency. It serves as a mechanism for domestic banks to cater to the international banking requirements of their clients.

This concept falls under correspondent banking, wherein a bank (or intermediary) conducts wire transfers, commercial transactions, deposit acceptance, and documentation collection on behalf of another bank.

This provision offers local banks increased access to international financial markets and the ability to serve global clients without the need for a physical presence in other countries.

India has actively been urging its partner nations to facilitate trade using the rupee, aiming to reduce the expenses linked with currency conversion during transactions.

Several other countries, including Bangladesh, Russia, Germany, Israel, Uganda, Sri Lanka, the UK, Singapore, and New Zealand, have also established 'vostro' accounts to engage in rupee-denominated trade.

(Inputs from Reuters)

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The Indian government on Tuesday announced the approval for banks from 22 partner nations, including Russia and the United Kingdom, to establish "vostro" accounts within India.

The Indian government on Tuesday announced the approval for banks from 22 partner nations, including Russia and the United Kingdom, to establish "vostro" accounts within India. This move aims to enhance the rupee trade by facilitating international banking services for clients with global banking needs. A "vostro" account is an account held by domestic banks for foreign banks in the local currency. It serves as a mechanism for domestic banks to cater to the international banking requirements of their clients. This concept falls under correspondent banking, wherein a bank (or intermediary) conducts wire transfers, commercial transactions, deposit acceptance, and documentation collection on behalf of another bank. This provision offers local banks increased access to international financial markets and the ability to serve global clients without the need for a physical presence in other countries. India has actively been urging its partner nations to facilitate trade using the rupee, aiming to reduce the expenses linked with currency conversion during transactions. Several other countries, including Bangladesh, Russia, Germany, Israel, Uganda, Sri Lanka, the UK, Singapore, and New Zealand, have also established 'vostro' accounts to engage in rupee-denominated trade. (Inputs from Reuters) WATCH WION LIVE HERE

India's rupee trade gets a 'Vostro' boost

The Reserve Bank of India (RBI) has given permission to banks from 18 countries to open Special Vostro Rupee Accounts (SVRA) and use Indian rupees to settle payments. The Indian government informed parliament of this, earlier this week.

The 18 countries are: Fiji, Botswana, Guyana, Germany, Kenya, Israel, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom

In response to a question, Union Minister of State for Finance Bhagwat Karad said banks from these 18 countries will have to approach authorised dealer (AD) banks in India who would obtain permission from the RBI for opening such an account after the due procedure.

The decision has been taken in the backdrop of the commodity crisis, post the start of the Ukraine war. Trade in local currencies has been suggested as a solution to wartime sanctions.&nbsp;

“Procedures for trade in INR have been delineated by the 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 operationalisation of SRVAs through the said FAQs, which are available to banks, importers and exporters etc,” Mr&nbsp;Karad stated in the Rajya Sabha.

Rajya Sabha is the upper house of the Parliament of India.

(With inputs from agencies) 
 
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The Reserve Bank of India (RBI) has given permission to banks from 18 countries to open Special Vostro Rupee Accounts (SVRA) and use Indian rupees to settle payments.

The Reserve Bank of India (RBI) has given permission to banks from 18 countries to open Special Vostro Rupee Accounts (SVRA) and use Indian rupees to settle payments. The Indian government informed parliament of this, earlier this week. The 18 countries are: Fiji, Botswana, Guyana, Germany, Kenya, Israel, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom In response to a question, Union Minister of State for Finance Bhagwat Karad said banks from these 18 countries will have to approach authorised dealer (AD) banks in India who would obtain permission from the RBI for opening such an account after the due procedure. The decision has been taken in the backdrop of the commodity crisis, post the start of the Ukraine war. Trade in local currencies has been suggested as a solution to wartime sanctions. “Procedures for trade in INR have been delineated by the 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 operationalisation of SRVAs through the said FAQs, which are available to banks, importers and exporters etc,” Mr Karad stated in the Rajya Sabha. Rajya Sabha is the upper house of the Parliament of India. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

RBI allows banks from 18 countries to trade in rupees. What does it mean?

India currency's - the rupee - is set to get used in international trade with some countries after India's Central Bank approved banks to open the 'Vostro accounts' for trade with Sri Lanka using the money trading.

What is 'Vostro Account'? India initiates foreign trade with rupee

What is 'Vostro Account'? India initiates foreign trade

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vostro account

India's rupee trade gets a 'Vostro' boost

RBI allows banks from 18 countries to trade in rupees. What does it mean?

What is 'Vostro Account'? India initiates foreign trade with rupee

What is 'Vostro Account'? India initiates foreign trade