As many as 9 particular vostro accounts have been opened with two Indian banks after permission from the Reserve Bank of India to facilitate abroad commerce in rupee, a prime authorities official stated on Tuesday.
Sberbank and VTB Bank—the biggest and second-largest banks of Russia, respectively—are the primary overseas lenders to obtain the approval after the RBI introduced the rules on abroad commerce within the rupee in July.
Another Russian financial institution Gazprom—which doesn’t have its financial institution in India—has additionally opened this account with Kolkata-based UCO Bank.
“Nine accounts have been opened. One in UCO Bank, one in Sber, one in VTB and 6 with IndusInd Bank. These six are different Russian banks,” Commerce Secretary Sunil Barthwal informed reporters right here.
The transfer to open the particular vostro account clears the deck for settlement of funds in rupee for commerce between India and Russia, enabling cross-border commerce within the Indian foreign money, which the RBI is eager to advertise.
The RBI has allowed the particular vostro accounts to take a position the excess steadiness in Indian authorities securities to assist popularise the brand new association.
UCO Bank already has a vostro account-based facility in Iran. Gazprombank, or GPB, is a privately-owned Russian lender and the third-largest financial institution within the nation by property.
Last month, the RBI and Finance Ministry requested the highest administration of banks and representatives of commerce our bodies to push export and import transactions within the rupee. They need banks in India to attach with their overseas counterparts for opening particular rupee vostro accounts to facilitate cross-border commerce within the Indian foreign money reasonably than the favored mode of the US greenback.
On when the rupee commerce will start with Russia, the secretary stated there’s a course of concerned in it and hopefully it will materialise quickly.
Mr. Barthwal stated he held a gathering with officers of UCO Bank, RBI and the Department for Financial Services and mentioned methods to advertise rupee commerce.
“We want to promote rupee trade because that is in the nation’s interest. We would also not be looking unnecessarily for dollars. To the extent, rupee trade is possible, we will go for it,” he added.
Source: www.thehindu.com