Image Source : PTI The Reserve Bank of India.
In a significant step towards boosting bilateral trade in local currencies, the Reserve Bank of India (RBI) has approved 156 Special Rupee Vostro Accounts (SRVAs) across 26 Indian banks. These accounts have been opened by 123 correspondent banks from 30 trading partner countries with an aim to enable smoother trade settlements in rupees.
Speaking about it the Rajya Sabha, Minister of State for Commerce and Industry Jitin Prasada outlined the government’s efforts to promote the Indian rupee for cross-border trade. He further informed that the RBI has established local currency settlement arrangements with key trade partners such as the UAE, Indonesia, and the Maldives.
“As of date, RBI has permitted 123 Correspondent banks from 30 trading partner countries for opening of total 156 SRVAs with 26 AD (authorised deal) banks in India,” Prasada said.
The government in consultation with the RBI, has taken several steps towards increasing the availability and acceptability of the domestic currency and use of other local currencies for cross-border transactions. This would enable exporters and importers to invoice and pay in their respective domestic currencies enabling the development of a bilateral foreign exchange market.
Replying to a separate question, the minister said the negotiations for free trade agreements (FTAs) with Oman, Australia, the UK, and the European Union are currently ongoing. He said the government is taking necessary measures to ensure that stakeholder consultations, including industry representation, are conducted at all stages of the negotiations.
Replying to another question on e-commerce exports, the minister said key regulatory and logistical challenges in these shipments have been identified, including delays in time taken from receiving the order to the fulfilment overseas, challenges in re-importing e-commerce returns and rejects, high banking fees for export payments reconciliation, and the lack of financial products such as export credit and insurance for cross-border e-commerce exporters. “Possible measures have been identified for consideration by industry and government stakeholders,” Prasada remarked.
(With PTI inputs)
ALSO READ: RBI MPC meeting: Reserve Bank cuts key lending rate by 25 basis points for first time since 2020
