What changed
Previously, AD Category-I banks maintaining Special Rupee Vostro Accounts could open an additional current account only for export settlements. Now, this facility is extended to cover both export and import transactions, providing greater operational flexibility.
What it means for you
Banks can now offer a single additional current account for constituents to handle both sides of INR trade settlements, simplifying processes and reducing account management overhead. This move supports the broader push for internationalisation of the rupee and may increase INR-denominated trade volumes.
What you must do
- Update internal policies and systems to allow the additional current account for both export and import settlements.
- Notify your constituents about the expanded facility and revised operational guidelines.
- Ensure compliance with the original Special Rupee Vostro Account framework from the July 11, 2022 circular.
- Train staff on handling import settlements through the new account to avoid procedural errors.
Who it affects
AD Category-I banks maintaining Special Rupee Vostro Accounts, Exporters and importers using INR settlement for trade, Bank operations teams handling trade finance and current accounts
Can we open multiple additional current accounts under this circular?
The circular permits opening one additional special current account per constituent for both export and import settlements. It does not explicitly allow multiple accounts, so banks should adhere to the single-account provision unless further guidance is issued.
Does this replace the earlier circular on export-only accounts?
No, this circular extends the earlier facility (FED Circular No. 08 dated November 17, 2023) by adding import settlements to the scope. The earlier circular remains relevant for the export-only provision, but now the account can be used for both purposes.
Are there any new reporting requirements for this account?
The circular does not introduce new reporting requirements. Banks must continue to follow existing reporting norms under the Special Rupee Vostro Account framework and the July 11, 2022 circular.