India CB approves rupee trade accounts for Sri Lanka

Dec. 16, 2022 – Colombo: India’s Central Bank has approved banks to open 05 ‘Vostro’ accounts for trade with Sri Lanka through the Indian rupee trade settlement mechanism, Reuters reported on Friday (16).
The Indian rupee trade settlement mechanism allows using Indian rupees instead of dollars and other major currencies for international transactions.
According to an official document reviewed by Reuters, India’s central bank has approved banks to open 12 ‘Vostro’ for trade in rupees with Russia.
The document showed that six other accounts, including five for trade with Sri Lanka and one for trade with Mauritius, have also been authorized.
The Reserve Bank of India (RBI) established the mechanism in July.
An Indian government official told Reuters that the government is looking to bring countries that are short of dollars into the mechanism.