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About SRVA:
- SRVA is an account maintained by domestic banks in rupees for foreign banks.
- It enables the domestic banks to offer global banking services to clients without the need for a physical presence overseas.
- This arrangement allows domestic banks to cater to clients with international banking requirements by facilitating transactions in their local currency, the rupee.
Components:
- Invoicing: All imports and exports must be valued and invoiced in Indian National Rupee (INR), according to the rules of invoicing.
- Exchange Rate: The Exchange Rate between the currencies of the trading partner countries would be market-determined.
- Settlement: The Final Settlement also takes place in INR.
Objective of SVRA:
- Reduced dependence on foreign currencies would make the country less vulnerable to external shocks.
- In the long-term it will promote Rupee as an international currency.
Nostro Accounts:
Loro Account:
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Why in news?
- India has implemented the Rupee/Kyat direct payment system through the Special Rupee Vostro Account (SRVA) via Punjab National Bank, simplifying the payment process for traders importing pulses from Myanmar.
