Goyal said that today several countries are realising that in trade, there is a need for change in currency for that and it involves a conversion cost, which in turn increases transactions cost also.
“We can address these issues through rupee trade (arrangement),” he told reporters here, adding that several countries are under discussions with the RBI on the subject.
Several banks, including HDFC Bank and UCO Bank, have opened special vostro accounts as of date to facilitate overseas trade in the rupee.
Sberbank and VTB Bank — the largest and second-largest banks of Russia, respectively — are the first foreign lenders to receive the approval after the RBI announced the guidelines on overseas trade in the rupee in July last year.
Another Russian bank Gazprom, which does not have its unit in India, has also opened this account with Kolkata-based UCO Bank.
The move to open the special vostro account clears the deck for settlement of payments in rupee for trade between India and Russia, enabling cross-border trade in the Indian currency, which the RBI is keen to promote.
The RBI has allowed the special vostro accounts to invest the surplus balance in Indian government securities to help popularise the new arrangement.