Russia becomes the first country to start its foreign trade with India in Rupees and gives up Dollar and Euro , while negotiating trade agreements with the country. Recently, rupee has been employed as a transactional currency in some trade deals with Russian companies.
Russia , India all set to facilitate Trade Mechanism in Rupees
In July of this year, the Reserve Bank of India (RBI) released guidelines to encourage the settlement of foreign trade in rupees. More rupee transactions are anticipated in the upcoming months as sanctioned hit Russia has opened up twelve and a half vostro accounts to promote trade and commerce with India.
Exports to Russia are likely to increase as a result of the rupee trade facilitation. Exports to Russia decreased by 16% from January to October of current fiscal year to $1.6 billion, primarily as a result of payment delays.
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Countries considering the rupee trade mechanism
About 30-35 nations, including those in Scandinavia, Asia, and Africa, have expressed interest in learning more about the rupee trade mechanism in order to possibly adopt it.
The neighbours of India, including Sri Lanka, Bangladesh, Myanmar, and Nepal, which have been experiencing a scarcity of dollar reserves, have also expressed interest in conducting business in rupees.
List of Russian Banks which have opened vosro accounts:
- Sherbank
- VTB
- Gazprom
- BCS
- MTS
- Tinkoff
- Soyuz
- Credit Europe Bank (Russia)
- PSCB
- Ros
- JSCB
Sherbank and VTB have opened one such account with their local branches.
Vostro accounts have been opened with below Indian Banks:
- Six accounts have been opened with IndusInd Bank
- One each account with UCO Bank, HDFC Bank, Union Bank of India and Canara Bank
India’s neighbor also join Rupee Bandwagon
SBI Mauritius and People’s Bank of Srilanka opened vostro accounts with State Bank of India (SBI)
Seylan Bank, NDB Bank, and Commercial Bank of Ceylon, three Sri Lankan banks, have opened vostro accounts with Indian Bank. One such account has been opened by Bank of Ceylon with its Indian branch.
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