Mechanism To Settle Trade Payments In Indian Rupee : RBI
RBI has set up a mechanism to settle trade payments in Indian rupee.
- The central bank has put in place this additional arrangement for invoicing, payment, and settlement of exports and imports in rupee.
- The move is aimed at promoting growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in Indian rupee.
- Before putting in place this mechanism, authorized dealer banks were required to take prior approval from the Foreign Exchange Department of RBI.
- Under the framework, all exports and imports may be denominated and invoiced in rupee.
- Authorized Dealer (AD) banks in India have been permitted to open rupee Vostro accounts.
- Accordingly, for settlement of trade transactions with any country, AD bank in India may open special rupee Vostro accounts of correspondent banks of the partner trading country.
