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RBI permits settlement of international trade in Indian Rupees (INR)
A. RBI has permitted authorized dealer (AD) banks in India to open Special Rupee Vostro Accounts of correspondent bank/s of the partner trading country to facilitate settlement of import/export transactions in INR.
The aforesaid relaxation shall bring out the following benefits:
- Advance against exports can be received in INR (subject to other conditions under export guidelines issued by RBI)
- Export receivables can be set off in INR against import payables from the same overseas buyer and supplier and vice versa (subject to other conditions under export guidelines issued by RBI)
B. The surplus balance in Special Vostro Accounts can be used for:
- Payments for projects and investments
- Export/Import advance flow management
- Investment in government treasury bills, government securities, etc. in terms of extant guidelines and prescribed limits, subject to the Foreign Exchange Management Act, 1999 (‘FEMA’) and similar statutory provisions.
Source: A.P. (DIR Series) Circular No. 10 dated 11 July 2022.