TMI BlogInternational Trade Settlement in Indian Rupees (INR)X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai. 2. The broad framework for cross border trade transactions in INR under Foreign Exchange Management Act, 1999 (FEMA) is as delineated below: a. Invoicing: All exports and imports under this arrangement may be denominated and invoiced in Rupee (INR). b. Exchange Rate: Exchange rate between the currencies of the two trading partner countries may be market determined. c. Settlement: The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down in Para 3 of this circular. 3. In terms of Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 , AD banks in India have been permitted to open Rupee Vostro Accounts. Accordingly, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowing any such receipt of advance payment against exports, Indian Banks shall ensure that available funds in these accounts are first used towards payment obligations arising out of already executed export orders / export payments in the pipeline. The said permission would be in accordance with the conditions mentioned in para-C.2 on Receipt of advance against exports under Master Direction on Export of Goods and Services 2016 (as amended from time to time). In order to ensure that the advance is released only as per the instructions of the overseas importer, the Indian bank maintaining the Special Vostro account of its correspondent bank shall, apart from usual due diligence measures, verify the claim of the exporter with the advice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val Process: The bank of a partner country may approach an AD bank in India for opening of Special INR VOSTRO account. The AD bank will seek approval from the Reserve Bank with details of the arrangement. AD bank maintaining the special Vostro Account shall ensure that the correspondent bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk Non Co-operative Jurisdictions on which FATF has called for counter measures. 11. The above instructions shall come into force with immediate effect. AD banks may bring the contents of this Circular to the notice of their constituents and customers concerned. 12. The directions contained in this circular have been issued under sections 10(4) and 11(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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