Brief Overview:
Non-resident entities holding Special Rupee Vostro Account (“SRVA”) for settling international trade transactions in Indian ₹, are now permitted to invest the surplus funds in Central Government Securities, including Treasury Bills (“G-Secs”).
The Master Direction- Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 (“Framework”) is updated to incorporate the same.
Technical Details:
Key aspects:
1) Investment limit– Not exceed 30% of outstanding stock of security. Exemption for specified securities classified under fully accessible route.
2) Exemption- From short term maturity cap as applicable to FPIs
3) Proceeds of Investments– To be credited back to SRVA.
4) Separate Accounts to be opened– Dedicated accounts to manage investments in G-Secs.
5) AD Banks responsibility–
(a) Give access to NDS OM;
(b) Report transactions on NDS-OM;
(c) Furnish any information in relation to such transactions; and
(d) Ensure compliance.
JC takeaway:
The Framework aims to open more alternatives for non-resident entities to manage their surplus in ₹ funds in the SRVA. This initiative also reinforces the ₹ ’s role in cross-border trade settlement, aligning with India’s broader strategy to promote ₹ in global trade.
For further details, please see:
For any queries/clarifications, please feel free to ping us and we will be happy to chat:
