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regular-article-logo Wednesday, 21 February 2024

Reserve Bank of India permits banks to open current account for export proceeds

India has been trying to promote rupee trade following the Russia-Ukraine war and the sanctions imposed by the West

PTI Mumbai Published 18.11.23, 08:54 AM
Reserve Bank of India.

Reserve Bank of India. File picture

The Reserve Bank of India (RBI) on Friday permitted banks to open additional current accounts for export proceeds in addition to special rupee vostro accounts with a view to providing greater operational flexibility to exporters.

To provide greater operational flexibility to exporters, banks maintaining special rupee vostro accounts as per the provisions of the RBI circular dated July 11, 2022, are permitted to open an additional special current account for its exporter constituent exclusively for settlement of their export transactions, RBI said in a notification.

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In July 2022, the RBI had asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of the increasing interest of the global trading community in the domestic currency.

“In order to promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR,” it said.

India has been trying to promote rupee trade following the Russia-Ukraine war and the sanctions imposed by the West.

In July 2022, the RBI decided to allow the settlement of India’s international trade in rupee. Accordingly, authorised Indian banks must open and maintain special rupee vostro accounts of the partner trading country’s banks.

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