India’s RBI issues guidelines for international trade in INR

The Reserve Bank of India (RBI) recently put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in Indian rupees (INR) to promote global trade and domestic exports and support the global trading community. Authorised dealer banks shall need approval from RBI’s foreign exchange department to avail of this benefit.

Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country against the invoices for the supply of goods or services from the overseas seller/supplier, an RBI circular in this regard said.

The Reserve Bank of India (RBI) recently put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in Indian rupees (INR) to promote global trade and domestic exports and support the global trading community. Authorised dealer banks shall need approval from RBI’s foreign exchange department to avail of this benefit.

The export/import undertaken and settled in this manner shall be subject to usual documentation and reporting requirements. Letter of Credit (LC) and other trade related documentation may be decided mutually between banks of the partner trading countries under the overall framework of Uniform Customs and Practice for Documentary Credits (UCPDC) and incoterms, it said.

Indian exporters may receive advance payment against exports from overseas importers in Indian rupees through the above rupee payment mechanism. Before allowing any such receipt of advance payment against exports, Indian banks shall ensure that available funds in these accounts are first used towards payment obligations arising out of already executed export orders/export payments in the pipeline, it added.

The bank of a partner country may approach an authorized dealer bank in India for opening of Special INR VOSTRO account. The AD bank will then seek approval from RBI with details of the arrangement.

Fibre2Fashion News Desk (DS)