RBI announces Measures to Promote Internationalisation of Rupee

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In Summary

The RBI introduces measures to boost the Indian Rupee's global use, enhancing trade, investments, and financial stability while establishing transparent rates and expanding Rupee-based transactions.

In Summary

The RBI has unveiled new measures to promote wider international use of the Indian Rupee (INR), expanding both trade and investment avenues.

Internationalisation of the Rupee means allowing the Indian Rupee to be used for global trade and financial transactions.

Key Measures Announced

Loans in Indian Rupees to Non-Residents: Authorised dealer banks in India and their overseas branches will be permitted to lend in INR to persons resident in Bhutan, Nepal, and Sri Lanka, including a bank.
Establishing Transparent Reference Rates: Financial Benchmarks India Limited (FBIL) will develop transparent reference rates for the rupee against major global currencies.
- Currently, the RBI publishes reference rates for the U.S. dollar, euro, Japanese yen, and sterling.
Widening Use of Special Rupee Vostro Accounts (SRVAs): SRVA balances can now be used to invest in corporate bonds and commercial papers.
- Previously, surplus vostro balances were allowed to be invested in central government securities.

Special Rupee Vostro Account

A Special Rupee Vostro Account is an account maintained by a foreign bank with an Indian bank to facilitate settlement of trade transactions directly in Indian Rupees (INR) without converting into foreign currencies.

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Internationalisation of Rupee Indian Rupee (INR)