RBI sets up mechanism to settle trade payments in Indian rupee
Tue 12 Jul 2022, 11:45:19
RBI has set up a mechanism to settle trade payments in Indian rupee. The central bank has put in place this additional arrangement for invoicing, payment, and settlement of exports and imports in rupee. The move is aimed at promoting growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in Indian rupee.
Before putting in place this mechanism, authorized dealer banks were required to take prior
approval from the Foreign Exchange Department of RBI. Under the framework, all exports and imports may be denominated and invoiced in rupee. Authorized Dealer (AD) banks in India have been permitted to open rupee Vostro accounts.
approval from the Foreign Exchange Department of RBI. Under the framework, all exports and imports may be denominated and invoiced in rupee. Authorized Dealer (AD) banks in India have been permitted to open rupee Vostro accounts.
Accordingly, for settlement of trade transactions with any country, AD bank in India may open special rupee Vostro accounts of correspondent banks of the partner trading country.
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