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About 22 Nations Opened Special Bank Accounts In India To Trade In Rupee: Minister
The RBI allowed invoicing and payments for international trade in Indian Rupee on 11 July 2022
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Banks from 22 countries have opened special Rupee vostro accounts in Indian banks in order to trade in local currency as part of gradual de-dollarisation plans, the Parliament was informed on Friday.
Simply put, vostro accounts enable domestic banks to provide international banking services to clients who have global banking needs.
In a written reply in Lok Sabha, Union Minister of State (External Affairs) Rajkumar Ranjan Singh listed out the names of the countries. They include Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, Bangladesh, Maldives, Kazakhstan and the United Kingdom.
"Government is engaged with the Indian trading community including the Small and Medium Enterprises (SMEs) to simplify the administrative procedures to implement this mechanism,” the minister said.
The Reserve Bank of India last year put in place an arrangement, allowing transactions in domestic currencies to promote the growth of global trade with an emphasis on exports from India and to bring in increasing interest towards the rupee.
The internationalisation of the rupee gathered steam following the Reserve Bank of India's (RBI) announcement of a mechanism to settle payments for international trade in rupees, especially for India's exports. The RBI allowed invoicing and payments for international trade in Indian Rupee on 11 July 2022.
Experts widely believe if the mechanism fructifies then it may go a long way in internationalizing the Indian currency rupee in the long run. A currency can be termed "international" if it is widely accepted worldwide as a medium of exchange.
To examine issues related to the internationalisation of INR and suggest a way forward, the RBI constituted an Inter-Departmental Group (IDG) in December 2021. The panel has recently come up with a report, where it made various short-term and long-term recommendations. (ANI)