RBI approved HDFC Canara open Vostro accounts
RBI approved HDFC Canara open Vostro accounts. The Reserve Bank of India has allowed HDFC Ltd and Canara Bank Ltd to open a special “Vostro Account” for trade with Russia in rupees. Vostro accounts will be opened in the country to facilitate trade with Russia.
Vostro account
A Vostro account is where a correspondent bank provides banking services on behalf of a small domestic bank as an intermediary. The domestic bank pays the correspondent bank for the services associated with a Vostro account.
Why the central bank of India allowed Vostro account service in India?
The Reserve Bank of India has allowed Vostro account service to promote exports, quicken imports, and cross-border transactions in Indian rupees.
* Indian Trade Secretary Sunil Bhardwaj stated that India has given the approval to banks to open Vostro accounts. It will give assistance facilitating trade with Russia in rupees.
List of banks that received clearance from RBI
HDFC Ltd, Canara Ltd, UCO Bank, Union Bank, and IndusInd Bank have received regulatory clearance for trade in the rupee till now. Moreover, two Russian Banks- Sber Bank and VTB have the RBI’s approval. Both banks have branches in India. The Russian banks are the first banks who received approval after RBI announces its guidelines on overseas trade in INR.
Bilateral trade between India and Russia is happening due to sanctions imposed by the United States of America and Europe due to Moscow’s invasion of Ukraine.
