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Investment Basket linked to Special Vostro Accounts should include corporate bonds
August 07, 2023
The Reserve Bank of India (RBI) can be requested to enhance the investment basket linked to Special Rupee Vostro accounts (SRVAs) to include corporate bonds, according to CS Setty, Managing Director, State Bank of India.
Speaking at Assocham’s corporate bond summit, Setty noted that as part of the government and RBI’s effort to internationalize the rupee, correspondent banks have been allowed to open Special Rupee Vostro accounts.
This account is used to settle international trade in Indian rupee. “RBI has allowed surplus in these (SRVA) accounts to be invested in Government Securities and Treasury Bills.
“RBI can be requested to enhance the investment basket linked to these accounts to include corporate bonds also,” said the SBI MD.
Correspondent banking is an arrangement whereby a bank in India (correspondent) holds deposits owned by other foreign banks (respondents) and provides payment and other services to the latter.
The settlement of international trade through Indian Rupee (INR) is an additional arrangement to the existing system of settlement. SRVA requires prior approval before opening, unlike Rupee Vostro account, according to the RBI.
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