Brief by Shorts91NewsDesk / 09:17am on 02 May 2025,Friday India
India's central bank, the Reserve Bank of India (RBI), has requested government approval to lift the 30% investment cap on Special Rupee Vostro Accounts (SRVAs) in short-term sovereign debt. Introduced in 2022 to promote trade settlements in rupees and support the rupee's internationalisation, SRVAs allow foreign banks to hold rupee balances in India through domestic banks. Currently, account holders can invest only up to 30% of their balances in securities with maturity under one year. The RBI argues that this restriction hinders short-term liquidity management and discourages broader participation in the SRVA program. Removing the cap could attract more foreign interest and strengthen rupee-denominated trade. The proposal is pending approval from the finance ministry. As of December 2024, SRVAs had a collective balance of ₹134.55 billion ($1.6 billion), with 156 accounts established by 123 banks from 30 countries. Recent RBI measures include allowing foreign branches of Indian banks to hold rupee accounts and Indian exporters to maintain foreign currency accounts abroad. (PC: Reuters)
