Home/ Companies / News/  Union Bank becomes first to open special vostro account for India-Malaysia trade settlement in rupee

Public sector lender, Union Bank of India becomes the first bank in the country to open a Special Rupee Vostro Account through its corresponding bank in Malaysia i.e. India International Bank of Malaysia. This means that trade between India and Malaysia can now be settled in the Indian rupee, in addition to the current modes of settlement in other currencies.

Union Bank's this move is in line with RBI's direction in July last year to allow the settlement of international trade in Indian Rupees.

In a statement, Union Bank said "this measure is aimed at facilitating the growth of global trade and to support the interests of the global trading community in Indian Rupee."

Further, it added, the mechanism will allow the Indian and Malaysian traders to invoice the trade in Indian Rupee and therefore achieve better pricing for goods and services traded.

Also, this mechanism is expected to benefit the traders on both sides as they can directly trade in Indian Rupee and therefore save on currency conversion spreads.

India-Malaysia bilateral trade, which has reached US$19.4 billion in FY 2021-22, is expected to benefit from the option to settle bilateral trade in Indian Rupee, the bank said.

Last week, on BSE, Union Bank's stock price closed at 66.49 apiece up by 0.4% on Friday. The bank's market cap is over 45,444 crore.

During December 2022 quarter, the bank garnered a robust growth of 106.81% in net profit to 2,245 crore compared to a profit of 1,085 crore in Q3FY22. Also, net interest income (NII) soared by 20.26% YoY to 8,628 crore. Net interest margin (NIM) expanded in Q3FY23 to 3.21% compared to 3% in Q3FY22 and 3.15% in Q2FY23.

In Q3FY23, Union Bank's gross NPA dropped sharply by 369 bps YoY and 52 bps QoQ to 7.93%. The gross NPA was at 11.67 % in Q3FY22 and 8.45% in Q2FY23. Net NPA, meanwhile, plunged by 195 bps YoY and 50 bps QoQ to 2.14%. The provision coverage ratio (PCR) stood at 88.50% in Q3 of FY23.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 02 Apr 2023, 01:17 PM IST
Next Story
Recommended For You
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout