RBI Allows Internet Banking on Rupee Vostro Accounts
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-2008/188 · issued 15 Nov 2007 · ~1 min read
Quick answerRBI now permits banks to offer internet-based operations on Rupee Vostro Accounts held by foreign exchange houses or banks, provided software prevents unauthorized access and banks ensure data secrecy, FEMA compliance, and KYC/AML norms.
What changed
Previously, internet banking guidelines did not explicitly cover Rupee Vostro Accounts. Now, RBI has decided to allow internet-based operations on these accounts, subject to strict conditions on data security, FEMA rules, and KYC/AML standards.
What it means for you
Banks can now offer digital access to Rupee Vostro Accounts, improving efficiency for correspondent banking. However, they must implement robust software controls to prevent unauthorized transactions and remain fully accountable for data confidentiality and regulatory compliance.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Ensure your internet banking software for Rupee Vostro Accounts has built-in controls to block unauthorized operations.
Review and strengthen data secrecy, confidentiality, and integrity measures for vostro account transactions.
Verify strict adherence to FEMA rules and KYC/AML standards for correspondent banking and exchange houses.
Update internal policies to align with this circular and existing internet banking guidelines from 2001 and 2005.
Who it affects
All scheduled commercial banks offering Rupee Vostro Accounts, Correspondent banking and exchange house operations teams, IT and compliance departments handling internet banking platforms
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 14:56 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What are Rupee Vostro Accounts?
These are accounts maintained by Indian banks for foreign banks or exchange houses, denominated in Indian rupees, used for trade and remittance settlements.
What are the key conditions for offering internet banking on these accounts?
Banks must ensure software prevents unauthorized operations, maintain data secrecy and integrity, comply with FEMA regulations, and follow KYC/AML standards for correspondent banking.
Does this circular replace earlier internet banking guidelines?
No, it only adds specific permissions for Rupee Vostro Accounts. All other internet banking matters continue to be governed by the 2001 and 2005 circulars.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2316: DBOD Comp BC No.5853/07.03.29/2007-08 — "Internet Banking - Internet Based Platforms for Dealing in Rupee Vostro Accounts@" dated November 15, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/188
DBOD Comp BC No. 5853 /07.03.29/2007-08
November 15, 2007
All Scheduled Commercial Banks
Dear Sir,
Internet Banking – Internet based Platforms for dealing in Rupee Vostro Accounts
Please refer to our circulars DBOD Comp BC No. 130/07.03.23/2000-01 dated June 14, 2001 and DBOD Comp BC No. 1658/07.03.29/2006-07 dated August 22, 2006 containing guidelines for Internet Banking in India.
2. On a review, it has been decided that banks may permit internet based operations on Rupee Vostro Accounts maintained by exchange houses or banks outside India with them, provided the banks in India ensure that the software will prevent any unauthorised operation. The internet based operations on vostro accounts are being permitted subject to the conditions that:
(i) Banks will remain responsible for secrecy, confidentiality and integrity of data.
(ii) Banks should strictly comply with FEMA rules/regulations issued in connection with operations/maintenance of vostro accounts in India.
(iii) Banks should strictly adhere to KYC and AML standards and procedures relating to correspondent banking/exchange houses.
3. In all other matters relating to internet banking services, banks may continue to be guided by the instructions contained in our circulars DBOD Comp BC No. 130/07.03.23/ 2000-01 dated June 14, 2001 and DBOD Comp BC No. 14/07.03.29/2005-06 dated July 20, 2005 respectively on internet banking.
4. Please acknowledge receipt.
Yours faithfully,
(Vinay Baijal)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/188 · issued 15 Nov 2007. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3940&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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