RBI Permits Opening Of Rupee Accounts Outside India For Currency Internationalisation

The Reserve Bank of India (RBI) on Thursday 30 May 2024, has allowed the opening of rupee accounts outside India with an aim to internationalise the domestic currency.

The RBI said in its annual report on 30 May that it has finalised a strategic plan for the financial year 2024-25 and envisaged liberalisation of the external commercial borrowing (ECB) framework and 'Go-live' for phase I of software platform for ECBs and trade credits reporting and approval (SPECTRA) project.

"INR lending by Indian banks to PROIs and enabling foreign direct investment (FDI) and portfolio investment through special accounts [special nonresident rupee (SNRR) and special rupee vostro account (SRVA)," said the report.

The rationalisation of the Liberalised Remittance Scheme (LRS) and review of the IFSC regulations under FEMA also are part of the agenda for the current financial year.

The RBI report further said that the rationalisation of regulations towards the internationalisation of the Rupee was undertaken to enable the settlement of bilateral trade in local currencies.

‘’With emphasis on continuous synchronisation of the FEMA operating framework with the evolving macroeconomic environment, rationalisation of various guidelines will be of primary focus,'' the central bank said in its annual report. The RBI will permit the opening of rupee (INR) accounts outside India by persons resident outside India (PROIs) as part of the 2024-25 agenda.