NEW DELHI: Nine banks have been given permission to open special vostro accounts for rupee trade with Russia with IndusInd Bank being one of them. So far, three banks have opened accounts – Gazprom Bank with UCO Bank, and Russia’s Sberbank and VTB, which have opened special accounts with their Indian branches.

The move to open the special vostro account clears the decks 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. Indian officials, however, said that the initial rupee trade will only be with Russia as Indian exporters seek to tap into the gap created by the sanctions imposed by the West.
In the long run, commerce secretary Sunil Barthwal said the idea was to focus on rupee trade with countries with which there was a large trade gap. “We want to promote rupee trade because that is in the nation’s interest,” he said.