The RBI recently issued an order permitting banks holding Special Rupee Vostro Accounts to establish an additional special current account. This new provision aims to facilitate exporters in conducting the settlement of their export transactions, thereby offering enhanced operational flexibility.
In a move initiated on July 11 of the previous year, the RBI had implemented an additional framework for managing invoicing, payment, and settlement of exports/imports conducted in INR (Indian Rupee). This system operates through the Special Rupee Vostro Accounts held by correspondent banks from partner trading nations, maintained with Authorised Dealer (AD) Category-I banks in India.
The primary goal behind the RBI's action is to bolster trade activities among nations that prefer conducting international trade settlements in rupees instead of the predominant use of dollars. This initiative not only encourages smoother trade flow but also provides domestic businesses engaged in rupee-based exports and imports with a safeguard against potential fluctuations in exchange rates.
(With Agency Inputs)
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