RBI has given permission to NRIs to open rupee accounts in authorized banks abroad.
In the latest step towards internationalization of the rupee, the Reserve Bank of India (RBI) has allowed overseas branches of banks to open rupee accounts for people living outside India.
Individuals’ resident outside India will be able to settle transactions with other individuals’ resident outside the country by using the balances in their repatriable rupee accounts, such as Special Non-Resident Rupee Account and Special Rupee Vostro Account (SRVA), the RBI said.
SRVAs require prior approval of RBI before opening, unlike rupee Vostro accounts.
Under these new types of accounts, settlement through rupees is an additional arrangement to the existing system, which uses freely convertible currencies and will work as a complementary system, reducing dependence on hard (freely convertible) currency.
In July 2022, SRVA was introduced, and since then several foreign banks have opened such accounts with banks in India.
An MoU signed by the RBI with the central banks of the United Arab Emirates, Indonesia, and Maldives to encourage cross-border transactions in local currencies.
