Rupee Invoicing and Special Rupee Vostro Accounts (SRVA)
Importers pay rupees into a foreign bank's vostro in India; exporters are paid rupees out of it.
In July 2022 RBI opened an additional route for India's trade: invoice, pay and settle imports and exports in Indian rupees instead of a foreign currency. The plumbing is a Special Rupee Vostro Account (SRVA), a rupee account that an Indian AD bank opens for a bank outside India. An Indian importer pays rupees into it; an Indian exporter is paid rupees out of it.
"Vostro" means "your account with us": the account belongs to the foreign bank but sits in India, in rupees. The SRVA is a specific kind of vostro, governed by its own RBI instructions, and it runs alongside, not instead of, normal foreign currency settlement.
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How a Trade Settles Through an SRVA
- 1
The partner bank gets an SRVA
An AD bank in India opens an SRVA for a bank resident outside India (or for its own branch abroad), under Regulation 7(1) of the FEM (Deposit) Regulations, 2016.
- 2
The contract is invoiced in INR
The exporter or importer agrees prices and invoices in rupees. The exchange rate between the rupee and the partner's currency is market-determined.
- 3
Importer pays rupees in
The Indian importer pays in INR, and the amount is credited to the SRVA of the partner country's correspondent bank against the overseas supplier's invoice.
- 4
Exporter is paid rupees out
The Indian exporter receives export proceeds in INR from the balance in the partner bank's SRVA.
- 5
Reporting follows FEMA as usual
Documentation and reporting of the underlying export or import is done under the existing FEMA guidelines, with the AD bank holding the SRVA responsible for reporting. From 1 October 2026, exports invoiced or settled in INR must be realised within twelve months (nine months for other exports) under Regulation 5 of the FEMA (Export and Import of Goods and Services) Regulations, 2026.
How the Rules Have Moved
| Date | Change |
|---|---|
| 11 Jul 2022 | A.P. (DIR) Circular No. 10 introduces INR invoicing and settlement through SRVAs; AD banks need RBI's prior approval to open one |
| FTP 2023 | Foreign Trade Policy para 2.52(d) recognises invoicing, payment and settlement of trade in INR under the RBI circular, through SRVAs |
| Aug 2025 | Prior RBI approval dropped: AD banks may open SRVAs without referring to RBI |
| Oct 2025 | Investment of SRVA balances widened from government securities to corporate debt instruments; AD banks allowed to lend in INR to residents of Bhutan, Nepal and Sri Lanka |
| 17 Jul 2026 | A.P. (DIR) Circular No. 19 consolidates all SRVA instructions and supersedes the earlier circulars |
| 20 Aug 2026 | DGFT Notification 30/2026-27 rewrites FTP paras 2.52 and 2.53: contracts may be in foreign currency or INR, proceeds may be realised in any foreign currency or INR, and INR realisations through non-resident rupee accounts earn FTP benefits at par |
What an SRVA Balance Can Be Used For
- check_circleSettling cross-border trade, and any other current or capital account transaction permitted under FEMA.
- check_circleInvestment in Indian debt instruments, governed by RBI's 2025 Master Direction on non-resident investment in debt instruments. RBI's FAQs confirm that investing SRVA balances in government securities and treasury bills does not require FPI registration.
- check_circleFDI and other permissible capital account transactions, per RBI's FAQs.
- check_circleBalances are repatriable, and the account can be funded by inward remittance or by transfer from other repatriable INR accounts.
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Features From the Original Design
Circular No. 10 also set out two operational features. The 2026 consolidation refers banks to extant instructions for these, so confirm the current text before relying on the detail.
- Export advances in INR
- Indian exporters could receive advance payment in rupees from overseas importers through the SRVA, with the AD bank first applying funds against pending export obligations.
- Set-off
- Export receivables could be set off against import payables with the same overseas counterparty.
How CCFE Tests This
Questions ask who opens an SRVA (an Indian AD bank, for a foreign bank), which regulation permits it (Regulation 7(1) of the FEM (Deposit) Regulations, 2016), and where an Indian importer's payment goes (into the partner bank's SRVA). The common trap is reversing the flow, so that the importer's rupees go "abroad". Another is answering that RBI approval is still needed to open one; the courseware may say so, but RBI removed that requirement in August 2025.
FAQs
What is a Special Rupee Vostro Account?expand_more
A rupee account that an AD bank in India opens for a bank outside India so that imports and exports can be invoiced, paid and settled in INR. Importers pay rupees into it and exporters are paid rupees out of it.
Does an AD bank need RBI approval to open an SRVA?expand_more
Not any more. The original July 2022 framework required prior approval; since August 2025 AD banks can open SRVAs without referring to RBI, and the July 2026 consolidated circular reflects this.
Can SRVA balances be invested in India?expand_more
Yes. Surplus balances can be used for permissible current and capital account transactions, including investment in government securities and corporate debt under RBI's directions on non-resident investment in debt instruments.
Is INR invoicing allowed under the Foreign Trade Policy?expand_more
Yes. Since DGFT Notification 30/2026-27 of 20 August 2026, FTP para 2.52 allows export contracts and invoices (other than ACU cases) in foreign currency or INR, and para 2.53 gives INR realisations through rupee accounts of non-residents, such as SRVAs, the same FTP benefits as foreign currency realisations.
Next steps
- Nostro & Vostroarrow_forward
- Import Paymentsarrow_forward
- Export Realisationarrow_forward
- FTP 2023arrow_forward
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