COLOMBO (NewsRadio); A Sri Lankan bank has opened a ‘vostro account’ with the State Bank of India to conduct bilateral trade in rupees.
The development was confirmed by the Indian Embassy in Colombo. Vostro accounts are held by a bank on behalf of another, often foreign bank, and are a key part of correspondent banking.
Only last week it was announced that the Reserve Bank of India has granted approval to open five vostro accounts for trade in rupees with Sri Lanka.
It is reported that India’s rupee trade settlement mechanism, a means of using rupees instead of US dollars and other big currencies for international transactions, is attracting interest from a number of countries.
