What is the special Rupee Vostro account system?
The special Rupee Vostro account system is a banking mechanism where one bank holds an account in a foreign currency on behalf of another bank. It helps the second bank provide services to its clients in overseas markets.
When did the Reserve Bank of India (RBI) introduce the rupee trade mechanism?
In July 2022, the RBI introduced the rupee trade mechanism to allow Indian traders to settle imports and exports in rupees, especially during Western sanctions on Russia.
How much Russian investment has been estimated in Indian government treasury bills?
Russian funds, estimated at $10-12 billion, have been invested in Indian government treasury bills. This investment increased due to various projects and investments.
Which countries have been allowed to open 'vostro' accounts in India?
India has allowed banks from 22 partner countries to open 'vostro' accounts in the country, including countries like Bangladesh, Germany, Israel, Russia, Sri Lanka, and the UK.
How does the RBI allow excess balances from vostro accounts to be used?
The RBI allows excess balances from vostro accounts to be invested in payments for various purposes, which can help address some of the issues related to trade deficits.
How has India's import of crude oil from Russia changed in recent years?
India's import of crude oil from Russia has significantly increased over the last year, leading to a wider trade deficit with Russia.
What is the current trade deficit between India and Russia, and how does it affect vostro accounts?
India's trade deficit with Russia has grown to $43 billion in FY23, resulting in large surpluses in vostro accounts.
