Russia starts foreign trade settlements in rupee, more countries to join

New Delhi: Russia has become the first country to begin settlement of foreign trade in rupee, giving up dollar and euro all together. Recently, a few transactions in the Indian currency involving Russian firms have taken place.The Reserve Bank of India (RBI) in July this year introduced guidelines to promote the settlement of international trade in rupee.Financial Express in a report quoted trade sources saying more transactions in rupee are likely to take place in coming months as a sanction-hit Russia has opened a dozen-and-a-half vostro accounts to facilitate trade.Not just Russia, Sri Lanka and Mauritius have opened vostro accounts to facilitate the rupee trade.Facilitating the rupee trade is expected to spur exports to Russia, which dropped by 16 per cent till October this fiscal from a year ago to $1.6 billion majorly due to the delayed receipt of payments.Countries interested in rupee trade mechanismThere are about 30-35 countries, including those from Asia, Scandinavia and Africa who have expressed interest in better understanding the rupee trade mechanism for possible adoption.India's neighbours - Sri Lanka, Bangladesh, Myanmar, Nepal - which have been facing shortage of dollar reserves have also shown interest in trade settlements in rupee.Also Read: Sri Lanka, Russia to use Indian rupee for international trade, more countries in talksIndia is also in talks with Southeast Asian, African and Latin American countries to start trade settlement in rupee.Which Russian banks have opened vostro accounts?In the recent months, trade with Russia has increased as it has enhanced the supply of discounted crude to India. After Russia began invasion in Ukraine, several Western countries slapped sanctions onMoscow, putting off the SWIFT system (the system which is used by banks for payments in foreign currency).Russian banks including Sberbank, VTB, Gazprom, BCS, MTS, Tinkoff, Soyuz, Credit Europe Bank (Russia), PSCB, Ros and JSCB have opened Vostro accounts.Of these, six accounts have been opened with IndusInd Bank and one each with UCO Bank, HDFC Bank, Union Bank of India and Canara Bank.As per the FE report Sberbank and VTB have opened one such account with their local branches.Meanwhile, SBI Mauritius and People’s Bank of Sri Lanka have opened vostro accounts with State Bank of India (SBI).Sri Lankan banks — Seylan Bank, NDB Bank and Commercial Bank of Ceylon — have opened vostro accounts with Indian Bank. Bank of Ceylon has opened one such account with its branch in India.Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.