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of <h1>RBI Introduces INR Settlement for International Trade via Vostro Accounts Under FEMA 1999, Boosting Global Trade</h1> The Reserve Bank of India introduced a system for settling international trade in Indian Rupees (INR) through a special rupee Vostro account, aimed at promoting global trade and supporting the international interest in INR. Authorized Dealer (AD) banks must obtain RBI approval to implement this mechanism. Under the Foreign Exchange Management Act, 1999, trade transactions can be invoiced and settled in INR, with exchange rates determined by the market. Indian importers pay in INR to the Vostro account of the partner country's bank, while exporters receive payments from these accounts. Documentation, advance payments, set-offs, and bank guarantees are governed by specific guidelines, and surplus balances can be used for various permissible transactions. Reporting and approval processes are outlined, ensuring compliance with existing regulations.
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