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India has permitted banks in 22 partner nations, including Russia and the UK, to establish “vostro” accounts within its borders, the government informed the parliament on Tuesday, aiming to bolster trade conducted in rupees.
Vostro accounts represent the funds a local bank typically manages on behalf of an overseas bank, denominated in the former’s currency.
India has been advocating for its partner nations to encourage trade valued in rupees, eager to minimise the transaction costs tied to currency exchanges.
The Reserve Bank of India has given the green light to banks from 22 countries, which comprise Bangladesh, Russia, Germany, Israel, Sri Lanka and the UK, among others, stated Bhagwat Karad, India’s under-secretary of state for finance, to the parliament.
Karad added that banks from nations such as Botswana, Fiji, Guyana, Kazakhstan, Kenya, Malaysia, Maldives, Mauritius, Myanmar, New Zealand, Oman, Belarus, Seychelles, Singapore, Tanzania and Uganda have been granted permission to establish accounts.