India’s financial markets are unlikely to be disrupted if foreign entities using special vostro accounts unwind their investments in government securities, Reserve Bank of India RBI ) officials said on Thursday.“About how much anyone has invested - that’s not something that we can say publicly. The settlement of trade transactions with other countries would require Indian banks to open Special Rupee Vostro accounts of correspondent banks of the partner countries.The RBI norms allow for surplus balances held in Special Vostro accounts to be invested in government securities.With India having stepped up oil imports from Russia last year, market speculation has built up about the quantum of funds that may have been invested in government securities. Bank treasury executives estimate such investments in a range of $10-20 billion. It is getting paid, most of it is getting paid. Some of it could be remaining as rupee balances in SRV accounts.

Source: Economic Times August 10, 2023 15:05 UTC