Following Russia, India is in talks with the United Arab Emirates and Saudi Arabia to allow them to settle transactions in Indian rupees, the sources said.
The Reserve Bank of India and the Ministry of Finance are working on a framework that will allow the trading of Indian currency. “The UAE is a big market for India, so traders in the country will clearly benefit from this move.Similarly, Saudi Arabia is India’s main trading partner. Due to the fact that it is a net importer to both countries, managing the excess rupee could be a problem,” a senior government official told the newspaper.India’s exports to the UAE, according to the Ministry of Commerce, Recorded in October 2022, Saudi Arabia has declined.
“Rupee trade settlement should be independent of currency fluctuations against the dollar and internationalizing the rupee is a good thing. The RBI and the Ministry of Finance are working on that framework,” the official continued. rice field.Vostro accounts hold assets held by foreign companies in Indian banks in Rupees. Therefore, traders, whether importers or exporters, can receive payments through this account. Meanwhile, the RBI has authorized HDFC Bank and Canara Bank to open his Vostro account exclusively for clearing Indian currency trade with Russia, according to international news outlets.
The other three banks approved to open Vostro accounts are UCO Bank, Union Bank and IndusInd Bank. Also, two Russian banks, namely Sber Bank and VTB, have obtained permission from the central bank. Both banks have branches in India. These two Russian banks are the first foreign lenders to receive his RBI approval to open his Vostro account exclusively for rupee trading.The RBI announced in July this year that it would allow trade settlements between India and other countries in rupees. It issued a notice on 11 July stating, “In order to support growth in global trade centered on exports from India and to support growing interest in INR from the global trading community, additional invoices will be issued. decided to introduce arrangements, payments and settlements of exports/imports in Indian Rupees.”