To promote cross-border transactions in Indian Rupee and local currencies, the Reserve Bank of India has liberalised the Foreign Exchange Management Act (FEMA). Overseas branches of Authorised Dealer banks can now open INR accounts (accounts that hold Indian Rupee) for non-residents to settle permissible current and capital account transactions with residents in India. The amendments also allow non-residents to settle bona fide transactions with other non-residents using balances in their repatriable INR accounts, such as Special Non-resident Rupee Accounts (SNRR) and Special Rupee Vostro Accounts (SRVA). Non-residents can now use repatriable INR account balances for foreign investments, including FDI in non-debt instruments. Indian exporters can also open foreign currency accounts overseas to settle trade transactions, including receiving export proceeds and paying for imports. To promote the use of the Indian Rupee (INR) in trade, the RBI introduced the Special Rupee Vostro Account (SRVA) in July 2022, and several foreign banks have since opened SRVAs with Indian banks. The RBI has also signed MoUs with the central banks of the UAE, Indonesia, and the Maldives to boost cross-border transactions in local currencies.
Site Admin | January 16, 2025 7:35 PM
RBI allows overseas branches of authorised Banks to open INR accounts
