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Informist, Tuesday, Aug. 12, 2025

 

NEW DELHI – The Reserve Bank of India Tuesday notified operational guidelines for investment in government securities through Special Rupee Vostro Accounts. This led to changes in the master direction on non-resident investment in debt securities. The central bank had allowed non-residents to invest excess cash in these accounts into government securities, including Treasury bills, in July 2022.

 

In the new section on the Special Rupee Vostro Account route for debt investment in India, the master circular said that non-residents with these accounts are eligible investors in Indian central government debt, including fully accessible route bonds. Overall investment limits under the general route will apply to investment made using the special rupee vostro account, but the short-term investment limits will not apply. This means that investors using the accounts may have more than 30% of their investment in a debt category in securities maturing within a year.

 

"The primary responsibility of complying with all applicable limits for investment in Government securities shall lie with the SRVA (Special Rupee Vostro Account) holders and the AD (Authorised Dealer) Category – I banks where these accounts are maintained," the master direction said.

 

Dealer banks shall open separate security accounts for Special Rupee Vostro Account clients to hold their debt investments. The money to buy the security shall come from and proceeds from the sale or interest payments shall go to the special vostro account, the RBI said. Banks shall facilitate account holders' access to the government bond market through the RBI's Negotiated Dealing System – Order Matching platform, and report any over-the-counter trades on the platform. The regulator can also demand reports or information on these investments, which the bank will have to comply with. 

 

The Special Rupee Vostro Accounts were introduced to promote the use of international trade in the rupee, initially for settlement of export transactions and then also for imports starting in June last year. Authorised Indian banks can open and maintain special rupee vostro accounts of a partner trading country's banks, for rupee holdings.  End

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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