Comments
Finance Ministry has convened a meeting of top chief executives of public sector banks and six private banks on December 5 to give push to rupee trade settlement in cross border trade.
Related Stories
SBI’s central board approves fund raising up to ₹10,000 cr via infra bonds
SBI’s loans to the infrastructure sector grew by 10.81 per cent year-on-year to stand at ₹3,67,889 crore as at September end 2022.The meeting, which will be chaired by Financial Services Secretary Vivek Joshi, will also see representatives from Reserve Bank of India, Commerce Ministry and External Affairs Ministry besides Indian Banks Association (IBA), sources close to the development said.
For overseas trade
It maybe recalled that Reserve Bank of India (RBI) had in July this year come out with detailed guidelines on cross border trade transactions in rupee. Since then about nine special vostro accounts have been opened with two Indian banks to facilitate overseas trade in the rupee.
The opening of special vostro accounts paves the way for settlement of payments in rupee for cross border trade between India and overseas countries including Russia. RBI has to popularise the new arrangement even allowed the special vostro accounts to invest the surplus balance in Indian government securities.
Related Stories
Commerce Dept brainstorms to take the bite out of export slowdown
Exporters seek cheaper credit, GST exemption on ocean freight, RoDTEP expansion, higher interest subsidyPayment in INR
“Indian importers undertaking imports through the 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”, RBI had earlier said.
Initially Indian banks were apprehensive over the implementation of the RBI formulated international rupee trade settlement mechanism. However, the Finance Ministry had on September 7 convened an inter-ministerial meeting to allay their concerns on the implementation of the new mechanism.
Related Stories
Proposal to levy GST on cryptos likely to be put on backburner
Putting it on hold will increase the problems for all stakeholders, say expertsPublic sector banks were worried that the international trade settlement mechanism in rupee could lead to trigger of penalties from the office of foreign assets control (OFAC) of the US Department of Treasury as most Indian banks have accounts and existing banking relationships in the US. OFAC administers and enforces Economic and trade sanctions based on US foreign policy and national security goals.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.