Rupee: Banks from 18 countries would trade in rupee, RBI permits 30 vostro accounts
New Delhi March, 16: After more than a year of approving two Russian banking sector giants, namely Sberbank and VTB Bank, to trade in rupees, the RBI has made significant progress, as now a total of 30 banks from overseas have the apex bank’s backing to open Special Vostro Rupee Accounts (SVRAs), adding 17 more countries other than Russia that will soon be trading in Indian rupees.
The countries that currently possess Special Rupee Vostro Accounts (SRVA) include Singapore, Uganda, New Zealand Israel, Botswana, Fiji, Russia, Oman, Guyana, Kenya, Malaysia, the United Kingdom, Mauritius, Myanmar, Germany, Seychelles, Tanzania, and Sri Lanka. In order to promote the new agreement as quickly as possible, the RBI also provided SRVA holders with the option of investing their surplus balance in Indian government securities.
Though the Director General of Foreign Trade (DGFT), Santosh Kumar Sarangi, suggested that with 30 accounts onboard, the transactions have started in “bits and pieces,” the central bank is considered to have made a major move in the promotion of the Indian rupee.
Enabling countries to practice cross-border trade and settle it in the Indian rupee is expected to strengthen the nation’s currency and would help establish it as a strong alternative to existing currency settlement currencies. “De-dollarize” is a term the world economy has long been chanting, and the RBI, with its approval, has played a major role in decentralising foreign trade.
