: Multiple Banks launch Vostro accounts for Rupee Trade #FinanceIndia #StockMarketNEWS Multiple Banks launch Vostro accounts for Rupee Trade New Delhi, Feb 16 (KNN) With the aim to facilitate overseas

@StockMarketNEWS Mon 20 Feb, 2023

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Multiple Banks launch Vostro accounts for Rupee Trade #FinanceIndia #StockMarketNEWS
Multiple Banks launch Vostro accounts for Rupee Trade New Delhi, Feb 16 (KNN) With the aim to facilitate overseas trade in rupee, several banks including HDFC Bank and UCO Bank, have opened special vostro accounts.

Many countries have expressed interest to have this arrangement for the local currency trade, a top government official said on Wednesday.

Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi said that so far 20 banks have opened a special rupee vostro account.

“The commerce ministry is in regular touch with banks and all major banks have shared a list of nodal officers to sort out exporters issues pertaining to these accounts,” he said.

Sarangi pointed out that this is a new initiative, there are teething troubles relating to the exchange rate mechanism, the repatriation of money. So, it has not fully taken off. “But we are constantly in touch with the banks, the RBI and our exporters to ensure that it picks up," he said.

He said that some exporters in Jaipur and other places have started the rupee trade.

As per reports, Indias neighbours, including Bangladesh, Sri Lanka and Mauritius, are also taking initiative for INR vostro account opening. These accounts are also opened by certain developed countries like Israel and Germany.

The DGFT expressed hope that more countries will come forward for this mechanism.

Commerce Secretary Sunil Barthwal said, "Initially, we were focusing on Russia because they were facing sanctions but now we have been in talks with several other countries.”

Opening of several vostro accounts shows that banks are seeing the potential for having a rupee trade, he added.

Sberbank and VTB Bank, the largest and second-largest banks of Russia, are the first foreign lenders to receive the approval after the RBI announced the guidelines on overseas trade in the rupee in July last year.

The move to open the special vostro account clears the deck for settlement of payments in rupee for trade between India and Russia, enabling cross-border trade in the Indian currency, which the RBI is keen to promote. (KNN Bureau)