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In order to facilitate overseas trade in rupee, Two Russian banks, Sberbank and VTB Bank have opened a special vostro account in their respective branches in Delhi, news agency PTI has reported citing sources.

These Russian banks are the first foreign lenders to receive this approval after the RBI announced the guidelines on overseas trade in rupee in July.

These banks have opened special vostro account in their respective branches in Delhi, sources have said.

Earlier last month, UCO Bank received RBI's approval of opening a special Vostro account with Russia's Gazprombank for settlement of trade in Rupee against the backdrop of sanctions imposed by western countries on Russia following its invasion of Ukraine. Under the Rupee Drawing Arrangements (RDAs), the bank of a partner country opens a special INR VOSTRO account with a bank in India.

Gazprombank, or GPB, is a private-owned Russian bank, the third largest bank in the country by assets. UCO Bank received about 15 applications from different countries to open Vostro accounts.

Last month, the Reserve Bank and Ministry of Finance asked top management of banks and representatives of trade bodies to push exports and import transactions in Rupee.

Currently, a large part of bilateral trade between India and Russia is getting settled in the rupee due to sanctions imposed by the US and Europe following Moscow's attack on Ukraine.

The Kolkata-based lender, among the first banks to receive the regulator's approval following the RBI's decision to promote rupee settlement, opened the account during this month.

The move to open the special vostro account clears the deck for settlement of payments in rupee for trade between India and Russia, enabling cross-border trade in the Indian currency, which the RBI is keen to promote.

The RBI has allowed the special vostro accounts to invest the surplus balance in Indian government securities to help popularise the new arrangement.

According to reports, Gazprombank is only facing sectoral sanctions, and is not under the Specially Designated Nationals, or SDN, sanctions.

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