The RBI on Friday issued an order allowing banks maintaining Special Rupee Vostro Accounts to open an additional special current account to enable their customers to make settlement of their export transactions. The move is aimed at providing greater operational flexibility to exporters.
The RBI, on July 11 last year, set up an additional arrangement for invoicing, payment and settlement of exports/imports in INR through Special Rupee Vostro Accounts of the correspondent banks of the trading partner country maintained with Authorized Dealer (AD) Category-I -banks in India.
The RBI move is aimed at increasing trade flows between nations that prefer to conduct international trade in rupees instead of dollars. Domestically, businesses that export and import in rupees can be better protected against exchange rate fluctuations.