Settlement of Cross-Border Transactions in Indian Rupees

To promote the use of the Indian Rupee (INR) in trade, the Reserve Bank of India (RBI) introduced Special Rupee Vostro Accounts (SRVAs) in July 2022, leading several foreign banks to establish SRVAs with Indian banks. Additionally, the RBI has signed Memorandums of Understanding (MoUs) with the central banks of the UAE, Indonesia, and Maldives to encourage local currency transactions.

To further facilitate cross-border transactions in INR, the RBI introduced the following regulatory changes on January 16, 2025:

1. Opening of INR Accounts by Overseas Branches of AD Banks

Overseas branches of AD Banks can now open INR accounts for non-residents. These accounts can be utilized for settling all permissible current account and capital account transactions with persons resident in India.

2. Settlement of bonafide transactions between Non-Residents

Non-residents can now settle bonafide transactions with other non-residents using balances in their repatriable INR accounts.

3. Utilization of Repatriable INR Balances for FDI

Non-residents are allowed to use balances held in their repatriable INR accounts for foreign investments, including Foreign Direct Investment (FDI) in non-debt instruments.

4. Foreign Currency Accounts for Indian Exporters

Indian exporters are now open accounts in any foreign currency overseas for trade settlement purposes. This includes receiving export proceeds and utilizing these proceeds to pay for imports.

These measures are expected to facilitate greater use of INR for cross-border transactions, reduce dependence on hard currencies, and strengthen India’s role in the global financial ecosystem.

Click to view regulatory changes

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=59538

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https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12767&Mode=0

https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12768&Mode=0