A Vostro account is an account that is opened or maintained by one bank on behalf of another bank.
Russia’s largest Sberbank and second largest VTB are the first foreign banks to receive this approval. These two are the first foreign banks to receive approval after the RBI announced guidelines on foreign trade in rupees in July.
Another Russian bank, Gazprom, has also opened a Vostro account with Kolkata-based UCO Bank.
Commerce Secretary Sunil Barthwal told reporters here, “Nine Vostro accounts have been opened. One in UCO Bank, one in Sber, one in VTB and six in IndusInd Bank. ,
The move to open a special Vostro account has paved the way for settlement of payments in rupees for trade between India and Russia. This will enable cross border trade in Indian currency which RBI wants to promote.
To help popularize the new system, the RBI has allowed special Vostro accounts to invest surplus balances in Government of India securities.
Asked when the rupee trade with Russia would start, the secretary said there is a process involved and it is expected to materialize soon.
Barthwal said that he has held a meeting with officials of UCO Bank, RBI and Department of Financial Services and discussed ways to promote rupee trading.
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