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New Delhi: The Indian government has asked the trade bodies and banks to explore opportunities to trade in rupee with more countries after facilitated currency trade with nations including Mauritius, Russia, Sri Lanka.
For the unversed, in July, the Reserve Bank of India (RBI) had set up a mechanism to settle India’s overseas trade transactions with willing nations in rupees. The mechanism was introduced amid a steadily falling rupee, with the government hoping that the move would help India pay for imports using local currency instead of the US dollars from its foreign exchange reserves.
Special vostro rupee accounts, or SVRA, have been opened by the Indian banks with the banks of Mauritius, Russia, Sri Lanka.
The RBI has allowed the special vostro accounts to invest the surplus balance in Indian government securities to help popularise the arrangement.
SBI Mauritius Ltd and People’s Bank of Sri Lanka have opened an SVRA with the State Bank of India (SBI), while Bank of Ceylon has recently opened an account in its Indian subsidiary in Chennai.
Russia’s Ros Bank has opened special rupee account with the Union Bank of India, while Sri Lanka has opened three such accounts with Chennai-based Indian Bank.
How many special rupee accounts have been opened?
Till now, a total of 18 special rupee accounts have been opened by 11 banks following the approval from the RBI.
India in talks with UAE and Saudi Arabia
A report by The New Indian Express quoted sources saying that India is in talks with the UAE and Saudi Arabia to allow settlement of trade in the Indian rupee.
“The UAE is a big market for India, so obviously the traders in the country will benefit from this move. Similarly, Saudi Arabia is a significant trading partner of India. However, the problem lies in the fact that we are a net importer from both these countries, so the excess rupee management can be an issue,” the reported quoted a top government source as saying.
As per the commerce ministry, India’s exports to the UAE and Saudi Arabia recorded a drop in October 2022.
India has been trying to promote rupee trade after the Russia-Ukraine war and the sanctions imposed by the West.
With inputs from agencies
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