India Seeks To Expand Bilateral Trade Through Rupee Accounts: Report

[Skull and Bones]

According to a report, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades

The Government of India is in talks with some smaller countries as it is trying to expand bilateral trade through bespoke rupee accounts. Along with this, it is also reportedly trying to internationalise indigenous payment methods.

According to a report by the Economic Times, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades.

People familiar with the matter told the publication that the countries included African countries such as Zimbabwe, Djibouti, Ethiopia, Malawi, Sudan and Ethiopia. As per the report, the National Payments Corporation of India (NPCI), the Reserve Bank of India (RBI), and the finance ministry also did not comment on the matter.

Following the agreement on strategic partnerships between nations, the RBI and NPCI will reportedly be involved in resolving the exchange rate and payment problems.

"We are engaging with a group of smaller countries which may be interested in bilateral trades via dedicated rupee account," the Economic Times quoted Asif Iqbal, President, IETO as saying.

The nation's flagship payment system, the Unified Payments Interface (UPI), created by NPCI, have gained recognition from all around the world. The Indian authorities are now also pushing the Rupay for more global acceptance.

The publication further quoted Asif Iqbal, "We are helping to kickstart bilateral talks after which we will make a pitch for the UPI payment system involving NPCI. Such baby steps will help the rupee gain international clout gradually through non-dollar bilateral trades," as saying

The country’s trade with Djibouti, Namibia, Ethiopia, Kenya and Cuba can be settled in Indian rupees against franc, Namibian dollars, birrs, shillings and pesos respectively.

India Seeks To Expand Bilateral Trade Through Rupee Accounts: Report

According to a report, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades

www.outlookindia.com

 

[epebble]

According to a report, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades

The Government of India is in talks with some smaller countries as it is trying to expand bilateral trade through bespoke rupee accounts. Along with this, it is also reportedly trying to internationalise indigenous payment methods.

According to a report by the Economic Times, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades.

People familiar with the matter told the publication that the countries included African countries such as Zimbabwe, Djibouti, Ethiopia, Malawi, Sudan and Ethiopia. As per the report, the National Payments Corporation of India (NPCI), the Reserve Bank of India (RBI), and the finance ministry also did not comment on the matter.

Following the agreement on strategic partnerships between nations, the RBI and NPCI will reportedly be involved in resolving the exchange rate and payment problems.

"We are engaging with a group of smaller countries which may be interested in bilateral trades via dedicated rupee account," the Economic Times quoted Asif Iqbal, President, IETO as saying.

The nation's flagship payment system, the Unified Payments Interface (UPI), created by NPCI, have gained recognition from all around the world. The Indian authorities are now also pushing the Rupay for more global acceptance.

The publication further quoted Asif Iqbal, "We are helping to kickstart bilateral talks after which we will make a pitch for the UPI payment system involving NPCI. Such baby steps will help the rupee gain international clout gradually through non-dollar bilateral trades," as saying

The country’s trade with Djibouti, Namibia, Ethiopia, Kenya and Cuba can be settled in Indian rupees against franc, Namibian dollars, birrs, shillings and pesos respectively.

India Seeks To Expand Bilateral Trade Through Rupee Accounts: Report

According to a report, the objective of this discussion is to substitute SWIFT by creating a different payment ecosystem and overcome the dollar-dominated trades

www.outlookindia.com

Very good news. Hitching a nation's fate to a currency managed by another country for its best interests is a bad idea. Remember Nixon's famous words: The dollar is our currency, but it’s your problem.

 

[kmc_chacko]

Eight countries open 50 special rupee vostro accounts in 6 months to trade in INR​

Eight countries have opened Special Rupee vostro Account (SRVA) to facilitate overseas trade in Indian rupee. In about six months, these accounts have touched half a century mark and more countries are showing interest in settling trade in the Indian currency.

This shows that India’s policy of facilitating trade in rupee has been gaining momentum. A report by PTI quoted sources saying that so far, 49 vostro accounts have been opened.

Which countries have opened SRVA with India?

The eight countries that have opened SRVA to facilitate trade in Indian rupee are:

1 – Russia

2 – Sri Lanka

3 – Mauritius

4 – Malaysia

5 – Singapore

6 – Myanmar

7 – Israel

8 – Germany

In July last year, India’s central bank, Reserve Bank of India (RBI), issued detailed guidelines on cross-border trade transactions in the Indian rupee.

India has been trying to promote the use of rupee for settlement in trade with other countries after sanctions were imposed by the West and European nations following the Russia-Ukraine war.

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Special vostro account holders are allowed to invest surplus balance in Indian government securities. The facility has been provided by the RBI to help popularise the new arrangement.

The RBI had said, “Indian importers undertaking imports through this mechanism shall make payment in INR (Indian Rupee), which shall be credited into the special vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller/supplier.”

What is Special Rupee vostro account?

Special Rupee vostro account, or SRVA, is a new trade mechanism announced by the RBI to settle international trade in rupees.

To settle trade deals, authorised banks need to open and maintain SRVA of the partner trading country’s banks.

Also Read: India, Bangladesh chuck the dollar, to settle trade in Rupee-Taka

Rupee vostro accounts keep the holding of the foreign entity in Indian bank, in Indian rupee. When an Indian importer make a payment to a foreign trader in rupees, the amount gets credited to this vostro account.

In the same way, when an Indian exporter has to be paid for goods and services in rupees, amount from this Vostro account will be deducted and same would be credited to the exporter’s regular account.

How is Special Rupee Vostro Account different from Rupee Vostro Account?

The settlement of International trade through INR is an additional arrangement to the existing system of settlement. SRVA requires prior approval before opening unlike Rupee Vostro account.

Must Read: Indian rupee going global? After Russia, 35 countries show interest in INR trade settlement mechanism

The settlement through INR is an additional arrangement to the existing system that uses freely convertible currencies and will work as a complimentary system. It helps minimise reduce dependence on hard (freely convertible) currency.

For opening SRVA, prior approval of RBI would be required.

Eight countries open 50 special rupee vostro accounts in 6 months to trade in INR

Special vostro account holders are allowed to invest surplus balance in Indian government securities. The facility has been provided by the RBI to help popularise the new arrangement

www.firstpost.com