The Reserve Bank of India (RBI) announced an additional framework for invoicing, payment, and settlement of exports/imports in Indian rupees.
According to the RBI, the authorised dealer banks should get the prior approval from its Foreign Exchange Department.
The central bank said the measure is taken to promote growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in the Indian rupee.
The RBI said the broad framework for cross border trade transactions in Indian rupee under Foreign Exchange Management Act, 1999 (FEMA) include that all exports and imports under this arrangement may be denominated and invoiced in Indian rupee, the exchange rate between the currencies of the two trading partner countries may be market determined, and the settlement of trade transactions under this arrangement shall take place in Indian rupee.
The RBI said in terms of Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016, authorised dealer banks in India have been permitted to open Rupee Vostro accounts.