RBI has approved 60 requests to open Special Rupee Vostro Account of correspondent banks from 18 countries

Current Affairs

  • The Reserve Bank of India (RBI) has permitted banks from 18 countries to open Special Vostro Rupee Accounts (SVRAs) to settle payments in rupees, the government said.
  • Speaking in Rajya Sabha, Union Minister of State for Finance Bhagwat Kishanrao Karad said that 60 such approvals have been given by the RBI.
  • These 18 nations include Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom.
  • Earlier RBI had for the first time permitted banks to open 05 Special Rupee Trade Accounts for trade with Sri Lanka and 12 VOSTRO Accounts for trade in Rupee with Russia through the Indian Rupee Trade Settlement Mechanism in December 2022.
  • The process of SVRA was initiated by RBI in July 2022. Under this, it has been decided to “make an additional arrangement for invoicing, payment and settlement of exports/imports in Indian Rupees”.
  • The announcement came against the backdrop of a commodity crisis triggered by Western sanctions against Russia after President Vladimir Putin launched a “special military operation” against Ukraine in February 2022.
  • Trading in local currencies has been presented as a solution to avoid the current wave of wartime international sanctions that are disrupting supply chains and global trade flows.

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