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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI issues FAQs on International Trade Settlement in Indian Rupees (INR)

03-Oct-2025 | NA

RBI has issued FAQs on International Trade Settlement in Indian Rupees (INR) effective from 3rd October 2025. Key Highlights: 1. The Special Rupee Vostro Account (SRVA) facilitates international trade settlement in Indian Rupees (INR) as an additional mechanism to existing systems using freely convertible currencies. It is designed as a bank-to-bank arrangement similar to correspondent banking, promoting wider use of INR in global trade. 2. Indian branches of foreign banks that are Authorised Dealer (AD) banks can open SRVAs with Reserve Bank of India (RBI) approval. Indian AD banks may open multiple SRVAs for different foreign banks from the same country. However, existing Rupee Vostro Accounts cannot be converted into SRVAs. 3. The exchange rate between INR and the trading partners currency will be market-determined. In cases where no direct quote exists, it will be derived through cross-currency rates using global currencies like USD or EUR. 4. Balances in SRVAs can be repatriated in freely convertible or partner-country currency based on the underlying transaction. Income from INR balances may also be repatriated, subject to applicable regulations and tax provisions. 5. Funds held in SRVAs may be used for any permissible current or capital account transactions under the FEMA framework, such as Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB). 6. INR exposures arising from SRVA transactions may be hedged as per applicable guidelines. The Indian AD bank is responsible for reporting all cross-border transactions undertaken through SRVAs. For more information, please refer to the attached document.

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