People’s Banks open Vostro account with HDFC Bank, India

People’s Bank has taken steps to further strengthen trade related services with India by opening an Indian rupee (INR) account with HDFC Bank, India.

This account will facilitate executing telegraphic transfers, performing foreign exchange transactions and result in expediting international trade transactions.

People’s Bank Chai-rman Sujeewa Rajapakse said: “We are very pleased to partner with the India’s leading financial service provider HDFC Bank which has a branch network of over 6000.

This will undoubtedly allow us to provide an enhanced range of international banking services to our clients who aspire to capitalise on the huge market opportunity our giant neighbour is presenting.”

CEO/General Manager Ranjith Kodituwakku said: “The INR account opened with HDFC Bank will allow us to provide all types of trade-related transactions including remittances and student payments to India.

The trust that HDFC’s customers and providers of capital have placed in it over the years has almost become legendary in the Indian corporate world and we at People’s Bank are happy to provide the same service to our customer base that wants to reach the Indian market.”

The Indian government has opened five special vostro accounts for trade in rupee with Sri Lankan banks with a view of facilitating trade with the island nation, official sources said

SBI Mauritius Ltd and People’s Bank of Sri Lanka opened an SVRA with State Bank of India (SBI). In addition, Bank of Ceylon opened an account in its Indian subsidiary in Chennai recently.

Union Bank of India has opened spec opened special rupee account of Ros Bank Russia while Chennai-based Indian Bank has opened such accounts of three Sri Lankan banks, including Colombo-based NDB Bank and Seylan Bank

These special vostro rupee accounts (SVRA) with banks of Sri Lanka rationalizing the rupee trade arrangement.

Under the rules, any surplus in these rupee accounts can be invested in treasury bills and government securities. Banks want to understand how these securities will be transferred to the buyers.

Under the arrangement announced by the RBI on July 11, an authorised bank in India can open special rupee vostro accounts of correspondent banks of any partner trading country.

In view of the increasing interest of the global trading community in the Indian Rupee (INR), Reserve Bank of India (RBI) allowed for a settlement mechanism to carry out transactions in the rupee, with immediate effect.

This system will pave the way for facilitating trade with countries currently unable to conduct transactions in US Dollars, Euro, or other dominant foreign exchange currencies.