The Reserve Bank of India (RBI) has issued a consolidated circular on Special Rupee Vostro Accounts (SRVAs), effective July 17, 2026. This move streamlines and replaces five earlier circulars on international trade settlement in Indian rupees. As a result, authorised dealer Category-I banks now have a single, unified framework to follow.
Key Details of the Special Rupee Vostro Account Framework
AD banks in India can open Special Rupee Vostro Accounts for their overseas branches or foreign resident banks. This is permitted under Regulation 7(1) of the Foreign Exchange Management (Deposit) Regulations, 2016. Additionally, banks may open separate current accounts for exporters and importers, exclusively for trade settlement purposes.
The SRVA serves as an additional channel for invoicing and settling exports and imports in INR. However, its use is not limited to trade alone. All permissible current and capital account transactions under FEMA can also be settled through this account. Therefore, the framework offers broader financial flexibility for cross-border dealings.
Banks can fund the SRVA through inward remittances or transfers from other repatriable INR accounts. Meanwhile, proceeds from permissible FEMA transactions can also be held within the account. Investments from SRVA balances in debt instruments — such as NCDs, bonds, and commercial papers — will follow the RBI’s Master Direction on Non-resident Investment in Debt Instruments, 2025.
What This Means for Banks and Trade Customers
One important change is that AD banks no longer need RBI approval to open an SRVA. This simplification, introduced earlier in August 2025, is now formally consolidated into this circular. Consequently, the process becomes faster and more straightforward for banks.
Documentation and reporting for cross-border SRVA transactions must follow existing FEMA 1999 guidelines. Additionally, details of SRVAs held by overseas correspondent banks must be updated periodically in the SRVA directory published by FEDAI. This new directory requirement is a fresh addition not present in earlier circulars.
The RBI has directed AD banks to inform their customers about these updated instructions without delay. For example, exporters and importers using INR-based trade settlement should familiarise themselves with the revised rules. Overall, this consolidation makes compliance simpler and clearer for all stakeholders.
Source: RBI Notifications
