Liberalization of norms for Special Rupee Vostro Accounts (SRVAs) and investment in Government Securities by non-residents

The Reserve Bank of India (RBI) issued two circulars aimed at facilitating international trade settlement in Indian Rupees and enhancing the utility of SRVAs maintained by persons resident outside India.

SRVAs were introduced under the framework for INR-denominated trade settlement, allowing correspondent bank(s) of the partner trading country (i.e. person resident outside India) to maintain rupee accounts with Indian banks to facilitate cross-border trade on behalf of overseas importers and exporters. In a move to streamline operations and promote wider adoption, RBI has announced the following key changes:

• Opening of SRVAs without prior RBI approval: AD banks may now open SRVAs of overseas correspondent banks without seeking prior approval from RBI. This move simplifies the process and encourages countries to settle trade in INR.
  
  
• Investment of surplus rupee balances in Government Securities: SRVA holders may invest their surplus rupee balances in Central Government Securities, including Treasury Bills. These investments may be made in both ‘specified securities’ under the Fully Accessible Route (FAR) and other eligible securities under the General Route.
  
  Investments under the General Route shall be subject to the limits and stipulations applicable to Foreign Portfolio Investors (FPIs), except that the short-term investment limit shall not apply to SRVA holders.

Operational guidance: Necessary instructions for such investments have been incorporated in the updated Master Direction – Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025.

AD banks are required to:

• Open separate security accounts for SRVA holders for holding such investments;
• Facilitate access to the Negotiated Dealing System – Order Matching (NDS-OM) platform;
• Report all over-the-counter transactions undertaken by SRVA holders outside NDS-OM;
• Furnish reports/information as prescribed by RBI; and
• Ensure compliance with all applicable regulations and legal provisions.

All sale/maturity proceeds and interest payments should be credited back to the SRVA, and the primary responsibility for compliance with investment limits shall lie with the SRVA holders and their respective AD banks.

These directions were effective from the date of notification, i.e., 12 August 2025. 

Source: A.P. (DIR Series) Circular No. 08 dated 5 August 2025 and A.P. (DIR Series) Circular No. 09 dated 12 August 2025