HDFC and Canara Bank get nod for rupee trade
The Reserve Bank of India has permitted HDFC Bank Ltd. and Canara Bank Ltd. to open a special “vostro account” for rupee commerce with Russia, according to a story published on Monday by Business Standard, which cited sources in the banking sector.
Vostro accounts, which a bank manages on behalf of another, frequently foreign, bank, are an essential part of correspondent banking.
Reuters’ requests for response to the Reserve Bank of India (RBI), HDFC Bank, and Canara Bank were not immediately fulfilled.
The measure was seen as enhancing business ties with Moscow in case Moscow is subject to more stringent Western sanctions for its invasion of Ukraine.
Sunil Barthwal, the Indian trade secretary, announced earlier this month that nine banks have been given permission to open “vostro” accounts in order to boost rupee trade with Russia.
UCO Bank, VTB Bank, and SberBank SBER all have accounts with Russian oil giant Gazprom.
With their own branch offices in India, MM has opened accounts.