The Reserve Bank of India (RBI) has given the go-ahead for India and Tanzania to use their national currencies for bilateral trade settlement. The use of national currencies in bilateral trade settlements is expected to reduce the cost of transactions and enhance the efficiency of cross-border trade. This, in turn, will lead to increased trade volumes and greater economic cooperation between India and Tanzania.
Indian High Commissioner to Tanzania, Binaya Pradhan, has expressed optimism that the business community will benefit from the move. In a tweet he said, “Good news for India-Tanzania Trade; Rupee & Tanzanian Shiling (Tsh) can now be used for settlement of bilateral trade, Reserve Bank of India has allowed such mechanism; business community from both sides should make best use of it”
Under this mechanism, authorised banks in India will open Special Rupee Vostro Accounts (SRVAs) of correspondent banks of Tanzania. Tanzanian banks will have to open Special Rupee Vostro Accounts in India by approaching authorised Indian banks, who will in turn approach RBI for their approval with details of the arrangement.
After the Hindenburg report, RBI is keeping a close watch on the top 20 conglomerates.
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