In a move towards de-dollarisation, the Reserve Bank of India (RBI) has allowed banks from 22 countries to open Special Vostro Rupee Accounts (SVRAs) for settling payments in Indian rupees, according to a report by Bizz Buzz.
To increase bilateral trade in local currency, 20 banks operating in India are expected to open 92 SRVAs of partner banks from 22 countries, as per the report.
These countries include Bangladesh, Belarus, Botswana, Fiji, Germany, Guyana, Israel, Kazakhstan, Kenya, Malaysia, Maldives, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda, and United Kingdom.
Meanwhile, the use of the rupee for international trade transactions seeks to enhance the accessibility and convenience of rupee trade settlements, keep a check on the flow of dollars out of India, and reduce transaction costs associated with currency conversions, further strengthening India's economic ties with the participating countries.
At the same time, accordibg to the media, industry experts believe that encouraging the use of the Rupee for invoicing and settlement of payments with foreign countries is a positive step. However, replacing the Dollar with the Rupee may not be feasible due to India's low share in global trade in Rupees compared to the dominant position of the Dollar.