Nine special vostro accounts opened for trade in rupee after RBI approval

The move to open the special vostro account clears the deck for settlement of payments in rupee for trade between India and Russia

As many as nine special vostro accounts have been opened with two Indian banks after permission from the Reserve Bank of India to facilitate overseas trade in rupee, a top government official said on Tuesday.

Sberbank and VTB Bank—the largest and second-largest banks of Russia, respectively—are the first foreign lenders to receive the approval after the RBI announced the guidelines on overseas trade in the rupee in July.

Another Russian bank Gazprom—which does not have its bank in India—has also opened this account with Kolkata-based UCO Bank.

"Nine accounts have been opened. One in UCO Bank, one in Sber, one in VTB and 6 with IndusInd Bank. These six are different Russian banks," Commerce Secretary Sunil Barthwal told reporters here.

The move to open the special vostro account clears the deck for settlement of payments in rupee for trade between India and Russia, enabling cross-border trade in the Indian currency, which the RBI is keen to promote.

The RBI has allowed the special vostro accounts to invest the surplus balance in Indian government securities to help popularise the new arrangement.

UCO Bank already has a vostro account-based facility in Iran. Gazprombank, or GPB, is a privately-owned Russian lender and the third-largest bank in the country by assets.