Jan 23, 2024

Opening of Additional Current Account for Export Proceeds for Category-I AD Banks

By way of a Circular dated July 11, 2022, issued by the RBI, Indian AD banks had been permitted to open rupee vostro accounts of the corresponding banks of the country with which trade is proposed to be undertaken. Accordingly, this provided an additional mechanism to undertake invoicing, payment, and settlement of exports / imports in INR. Further, by way of a Circular dated April 19, 2022, RBI had instructed all banks to open and operate current accounts and cash credit / overdraft facilities (‘CC/OD’) accounts to help promote credit discipline among the borrowers and enable better monitoring for the lenders. In light of the abovementioned Circulars, RBI has now allowed for AD Category- I banks having a rupee vostro account to open an additional current account to exclusively deal with the exporter constituent of such banks and ease the settlement of the export transactions. This was made effective by way of a Circular dated November 17, 2023. The requirement postulated in the Circular addresses the need for greater operational flexibility to the exporters.




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