- A circular in this regard was issued by the RBI on July 11, 2022
- The circular was submitted “Indian Rupees (INR) International Trade Regulations”
- The information was confirmed by the Union Minister of State for Finance, Bhagwat Kisanrao Karad.
The Reserve Bank of India (RBI) has authorized invoicing and payments for international trade in Indian Rupee, Union Minister of State for Finance Bhagwat Kisanrao Karad informed the Rajya Sabha on Tuesday.
In a written response to a question posed to Rajya Sabha, Karad said the central bank had allowed payments for international trade in Indian currency through a circular on “International Trade Regulations in Indian Rupees (INR) published on July 11, 2022.
Giving more information, the Minister said that under paragraph 10 of the circular, the approval process is that for the opening of special INR Vostro accounts, the banks of the partner countries can contact the banks of the authorized dealers (AD) in India who can seek approval from RBI with the details of the arrangement.
The AD bank that operates the Vostro INR Special Account is required to ensure that the correspondent bank is not from a country or jurisdiction in the updated FATF Public Statement on High-Risk and Non-Cooperative Jurisdictions on which the FATF called for countermeasures, he said. .
RBI’s Financial Inclusion Index rises
Meanwhile, the RBI’s Composite Financial Inclusion Index (FI Index) reflecting the extent of financial inclusion across the country rose to 56.4 in March 2022, showing growth in all metrics.
The index captures information about various aspects of financial inclusion in a single value between 0 and 100, where 0 represents complete financial exclusion and 100 indicates complete financial inclusion.
“The value of the FI index for March 2022 stands at 56.4 compared to 53.9 in March 2021, with growth seen across all sub-indices,” the RBI said in a statement.
In August last year, the central bank said it had been conceptualized as a comprehensive index, incorporating details of banking, investment, insurance, post, as well as the pensions sector, in consultation with government and respective industry regulators.
The FI index comprises three main parameters: access (35%), use (45%) and quality (20%), each of which consists of various dimensions, which are calculated on the basis of several indicators.
The FI Index was constructed without any “base year” and as such reflects the cumulative efforts of all stakeholders over the years towards financial inclusion.
The index is now published annually.
(With agency contributions)
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