India should move towards complete convertibility of rupee

The IDG believes that CAC is not a pre-condition for internationalisation of INR, or vice-versa, and makes several recommendations over the short-term and medium-term horizons

It is nearly a year since the Reserve Bank of India (RBI) issued its AP (DIR) Circular No.10 dated July 11, 2022, allowing foreign banks to open Special Vostro Accounts (SVA) with Indian banks to facilitate settlement of trade transactions in non-convertible rupees. Although a few foreign banks have opened such accounts and a few transactions have been put through such accounts, mainly to pay for imports of crude oil from Russia, by and large most foreign banks have stayed away from the new facility and the exporters and importers in India and abroad have also preferred to continue invoicing in US dollars, euro, or any other convertib