Mumbai: Reserve Bank said that it has decided to put in place an additional arrangement for invoicing, payment and settlement of exports or imports in Indian Rupee. According to an official notification, the decision has been taken to promote global trade and to support the increasing interest of the global trading community in the Indian currency.
RBI said that banks will require prior approval from RBI’s Foreign Exchange Department to set up this facility. As per the broad framework, all exports and imports under this arrangement shall be denominated and invoiced in Indian Rupee while the exchange rate between currencies of the two trading countries would be market determined. As for settlement, authorised dealer banks in India will be allowed to open a Special Rupee Vostro Account of the correspondent bank of the partner trading country.
RBI clarified that the export and import undertaken in this manner shall be subject to usual documentation and reporting requirements. The apex bank further said that the Surplus Balance in these Special Vostro Accounts can be used for permissible capital and current account transactions in accordance with mutual agreement.
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