Answer: The settlement of International trade through Indian Rupees (INR) is an additional arrangement to the existing system of settlement. SRVA requires prior approval before opening unlike Rupee Vostro account.

Answer: The settlement through Indian Rupees (INR) is an additional arrangement to the existing system that uses freely convertible currencies and will work as a complimentary system. This will reduce dependence on hard (freely convertible) currency.

Answer: Yes, for opening of Special Rupee Vostro Account, prior approval of RBI would be required. The bank willing to open Special Rupee Vostro Account for bank of the partner country should have a good level of business resilience and financial health. Second, they need to have experience in facilitating trade/investment transactions and capability to provide other financial services. Third, AD banks should have good correspondent relationships with banks in partner countries.

Answer: The term correspondent banking relationship acts as an intermediary or agent, facilitating wire transfers, conducting business transactions, accepting deposits and gathering documents on behalf of another bank. Correspondent banks are most likely to be used by domestic banks to service transactions that either originate or are completed in foreign countries. Domestic banks also use correspondent banks to gain access to foreign financial markets and to serve international clients without having to open branches abroad.

Answer: This is essentially a bank-to-bank arrangement similar to correspondent banking arrangement.

Answer: The AD bank approaching RBI for seeking approval for opening of Special Rupee Vostro Account must submit the following information along with their proposal/request:

1. The details of the arrangement between AD bank and correspondent bank from the trading partner country along with the funds flow.

2. A brief write-up on the foreign banks seeking correspondent relationship for Special Rupee Vostro Account.

3. Copy of the request letter of the correspondent bank to AD bank.

4. Confirmation from AD bank that the due diligence has been carried out by AD bank which establishes correspondent banking relationship as per our extant guidelines {Master Direction - Know Your Customer (KYC) Direction, 2016 dated Feb 25, 2016) (As amended from time to time)}.

5. Confirmation from AD bank stating that the correspondent bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk & Non-Co-operative jurisdictions on which FATF has called for counter measures.

6. Confirmation from AD bank that they shall ensure that all the transactions taking place in the Special Rupee Vostro Account of the correspondent bank are strictly in adherence to the instructions given in the A.P. (DIR Series) Circular No. 10 dated July 11, 2022.

7. Financial parameters pertaining to the correspondent bank as required for the proposal may be obtained beforehand by email to fedcotrade@rbi.org.in and the same may be furnished by AD bank along with the proposal.

Answer: Yes, provided Indian branch of foreign bank is an AD bank. This is subject to approval of Reserve Bank as in the case of other such accounts.

Answer: No

Answer: Yes

Answer: No. AD bank in India can open multiple Special Rupee Vostro Accounts for different banks from the same country.