Why in the news?
India has simplified the payment mechanism for traders importing pulses from Myanmar, requiring them to use the Rupee/Kyat direct payment system through the Special Rupee Vostro Account (SRVA) through the Punjab National Bank.
International Transactions Settlement Mechanism:
[1] Vostro Accounts:
[2] Nostro Accounts:
[3] Loro Accounts:
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What is Special Rupee Vostro Account (SRVA)?
| Information | |
| Definition | Domestic banks hold INR accounts for foreign banks, promoting direct trade in rupees. |
| Purpose |
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| Framework Components |
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| Functioning |
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| Compliance |
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| Purpose of the Arrangement |
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How are the SRVA different from the already existing Rupee Vostro Account?
- The settlement of International trade through Indian Rupees (INR) is an additional arrangement to the existing system of settlement.
- SRVA requires prior approval (of RBI) before opening unlike Rupee Vostro account.
PYQ:[2015] Convertibility of rupee implies: (a) being able to convert rupee notes into gold (b) allowing the value of rupee to be fixed by market forces (c) freely permitting the conversion of rupee to other currencies and vice versa (d) developing an international market for currencies in India |











