RBI to boost rupee’s internationalization, liberalize norms for non-residents
On Thursday, the Reserve Bank of India (RBI) allowed the opening of rupee accounts outside India as part of its strategic action plan to internationalize the domestic currency.
The RBI will permit the opening of rupee (INR) accounts outside India by persons resident outside India (PROIs) as part of the 2024-25 agenda for the internationalization of the domestic currency.
With emphasis on continuous synchronization of the FEMA operating framework with the evolving macroeconomic environment, the central bank said that the rationalization of various guidelines will be of primary focus in its annual report.
The RBI said it has finalized a strategic action plan for 2024-25 and envisaged liberalization of the external commercial borrowing (ECB) framework and ‘Go-live’ for phase I of a software platform for ECBs and trade credits reporting and approval (SPECTRA) project.
“INR lending by Indian banks to PROIs and enabling foreign direct investment (FDI) and portfolio investment through accounts as special nonresident rupee (SNRR) and special rupee vostro account (SRVA),” the report said.
Rationalization of the Liberalized Remittance Scheme (LRS) and review of the IFSC regulations under FEMA are also part of the agenda for the current financial year.
The RBI report further said the rationalization of regulations towards promoting the internationalisation of the INR was undertaken to enable the settlement of bilateral trade in local currencies.
The RBI report added that the liquidity operations would continue to be in sync with the stance of the monetary policy, while the foreign exchange operations would be guided by the objective of ensuring orderly movements in the exchange rate of the rupee.
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