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RBI notification on international trade settlement in Indian rupeesThe Reserve Bank of India unveiled a rupee settlement system for international trade, according to a notification on Monday. Under this mechanism for international trade settlements in rupees, banks will need to seek prior approval to use, the RBI said in a release on Monday.The order takes immediate effect and the mechanism is designed to “promote growth of global trade with emphasis on exports,” the RBI said.The notification said, in order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR (Indian rupee), it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in INR. “Before putting in place this mechanism, AD banks shall require prior approval from the Foreign Exchange Department of Reserve Bank of India, Central Office at Mumbai,” added the RBI notification.Under this new mechanism, exporters and importers can use a Special Vostro account linked to the correspondent bank of the partner country for receipts and payments denominated in rupees.For the detailed release, please read here. 

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