The Reserve Bank of India (RBI) has received requests from banks to set up their mechanisms to settle international trade payments in rupees, a deputy governor of the central bank said on August 5.
“On the rupee trade settlement mechanism, we have received some requests from banks. Many large banks are still in the process of finalising the internal arrangements,” Deputy Governor T Rabi Sankar said at a press briefing post the announcement of the RBI’s monetary policy decision.
“There is a lot of to and fro in terms of discussions. More of them will start coming in the days ahead. But we have received a few requests,” added Rabi Sankar.
The central banker did not name the banks that have approached the RBI.
Also read: Trade settlement in rupee major step towards internationalising currency, experts say
Amid persistent weakness in the rupee, the RBI on July 11 announced that banks can settle trade transactions in the Indian currency. The central bank said the move was to promote the growth of global trade and to support increasing global interest in the rupee.
To settle these trade deals, authorised Indian banks need to open Special Rupee Vostro accounts of the partner trading country's bank. Indian importers using this mechanism need to pay in rupees. This will 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.
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