RBI Eases SRVA Norms for INR Trade Settlement

PR No. 2025-2026/839; Dated: 05.08.2025

Background: RBI’s INR Trade Settlement Framework

To promote the internationalisation of the Indian Rupee and facilitate trade settlements in INR, the Reserve Bank of India (RBI) had earlier introduced a framework allowing for the invoicing, payment, and settlement of exports and imports in Indian Rupees. This initiative was aimed at reducing dependency on foreign currencies and enhancing bilateral trade with partner countries, especially those facing dollar liquidity constraints or sanctions.

Role of Special Rupee Vostro Accounts (SRVAs)

As part of this arrangement, Authorised Dealer (AD) banks were permitted to open Special Rupee Vostro Accounts (SRVAs) of correspondent banks from partner countries. These accounts were designed to hold the INR received from Indian importers for settlement of trade obligations. However, opening such accounts required prior approval from the RBI, which often involved a detailed review of the applicant bank, country risk, and the nature of the trade relationship.

Key Regulatory Change: Relaxation of Approval Requirement

In a major easing of compliance, the RBI has now decided that AD banks can open SRVAs without obtaining prior approval. This move streamlines the operational process and is expected to significantly reduce the turnaround time for enabling INR-based trade settlement. It reflects growing confidence in the underlying risk management practices of AD banks and signals RBI’s commitment to fostering a more facilitative regulatory environment for cross-border transactions in INR.

Implications for Trade and Financial Ecosystem

This change is likely to boost the appeal of INR invoicing among India’s trade partners and promote broader adoption of the rupee in global transactions. It may particularly benefit exporters and importers engaged with countries where USD access is restricted or costly. Additionally, it strengthens India’s strategic push toward de-dollarisation of trade flows and enhances the credibility of the Retail Direct and FX platforms by enabling smoother integration of global banking networks with the Indian financial system.

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