A significant number of Russian companies have utilised nearly $4 billion from their rupee vostro accounts in Indian banks to procure Indian-made arms and various other goods over the past six to eight months.
Rupee vostro accounts serve as repositories for foreign entities to hold their holdings in Indian banks in Indian rupees.
According to reports, Russia was one of the 22 countries permitted to establish special rupee vostro accounts (SRVAs) with Indian banks for trading in the local currency.
Despite not identifying significant investment prospects in India, Russian firms have reportedly utilised approximately half of the approximately $8 billion funds held in their rupee vostro accounts over the past eight months.
In July 2023, the Reserve Bank of India authorised 20 banks operating within the country to establish 92 special rupee vostro accounts (SRVAs) for partner banks from 22 different countries.
A significant number of Russian companies have utilised nearly $4 billion from their rupee vostro accounts in Indian banks to procure Indian-made arms and various other goods over the past six to eight months. Rupee vostro accounts serve as repositories for foreign entities to hold their holdings in Indian banks in Indian rupees.
According to reports, Russia was one of the 22 countries permitted to establish special rupee vostro accounts (SRVAs) with Indian banks for trading in the local currency. Despite not identifying significant investment prospects in India, Russian firms have reportedly utilised approximately half of the approximately $8 billion funds held in their rupee vostro accounts over the past eight months. This expenditure, totalling nearly $4 billion, includes purchases of Indian-made arms and other commodities.
In July 2023, the Reserve Bank of India authorised 20 banks operating within the country to establish 92 special rupee vostro accounts (SRVAs) for partner banks from 22 different countries. This move was aimed at fostering bilateral trade conducted in local currencies, reflecting efforts to enhance economic cooperation between India and its trading partners.
In a written response to the Lok Sabha, Minister of State for Commerce and Industry, Som Parkash, disclosed that an agreement was inked between the Reserve Bank of India (RBI) and the Central Bank of the UAE on July 15.
This agreement facilitates exporters and importers to invoice and conduct transactions in their respective domestic currencies. Such an arrangement lays the groundwork for the establishment of a bilateral foreign exchange market, aiming to streamline trade processes between India and the UAE.
Image Source: Mint
