The Reserve Bank of India (RBI) has asked banks to put in place additional arrangements for export and import transactions in Indian rupees.
In its circular, RBI said, “In order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports / imports in INR.”
“Indian importers undertaking imports through this mechanism shall make payment in INR 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,” it added.
Exporters, undertaking overseas shipments of goods and services through this mechanism, will be paid the export proceeds in Indian rupees from the balances in the designated Special Vostro account. The balance in special vostro accounts can be used for payments for projects and investments, export/import advance flow management; and investment in government bonds.
It is expected that this mechanism may enable Indian exporters to receive advance payment against exports from overseas importers in rupees and will help in increasing interest of the global trading community in the domestic currency.