An SRVA is a rupee-denominated Vostro account that a foreign bank (or correspondent) maintains with an Indian AD Category-I bank to settle cross-border trade in Indian Rupees (INR).

To facilitate international trade settlement in INR, reduce dependence on third-country currencies, deepen INR usage globally, and provide an additional channel for trade with countries where conventional settlement is constrained.

A foreign bank (on behalf of its resident importers/exporters) can open an SRVA with an Indian Authorised Dealer Category-I (AD Cat-I) bank, subject to due diligence, KYC/AML checks, and regulatory approvals where needed.

INR is credited/debited in the SRVA against underlying export/import invoices. The foreign buyer pays in their local currency to its domestic bank, which uses the SRVA arrangement to settle the transaction in INR with the Indian AD bank for the Indian exporter, and vice-versa for imports.

Previously, in Central Government securities (including T-Bills). As per the latest RBI circular you covered, SRVA surplus may also be invested in non-convertible debentures/bonds and commercial papers issued by Indian companies, subject to applicable limits and reporting.

They are reckoned under the corporate debt securities limit (General Route). However, certain constraints (e.g., minimum residual maturity and issue-wise cap) do not apply to SRVA investments as specified in the circular. Compliance responsibility rests with SRVA holders and AD Cat-I banks.

Primary responsibility lies with the SRVA holder and the maintaining AD Cat-I bank. Banks must open separate demat accounts for corporate debt holdings and report transactions to SEBI-registered depositories for limit reckoning, along with other periodic returns prescribed by RBI.

Standard correspondent banking due diligence: entity KYC, beneficial ownership, sanctions screening, AML/CFT policies, board/management details, specimen signatures, and any bilateral documentation required by the AD Cat-I bank under RBI’s KYC Master Directions.

Pricing is agreed between the counterparties via the banks based on market INR quotes. The underlying invoice is denominated in INR, and settlement occurs at the agreed INR rate on the value date, per banking practice.

Usage is ring-fenced for permitted current account transactions, approved investments, and settlements per RBI rules. Repatriation/convertibility follows FEMA and RBI instructions; AD banks must ensure end-use compliance and documentation.

Nostro: “Our account with you.” Vostro: “Your account with us.” An SRVA is a specific Rupee Vostro tailored for INR trade settlement under RBI’s framework. Loro refers to third-party accounts held with another bank.

No. SRVAs are typically opened by foreign banks/correspondents. Individual exporters/importers access SRVA settlement through their banks; they do not hold SRVA accounts personally.

Eligibility depends on DGFT/FTP and RBI guidelines in force (e.g., realization in INR under SRVA is treated as payment received as per notified conditions). Exporters should verify scheme-specific conditions with their AD bank.

KYC/AML and sanctions compliance, documentation risk, operational/settlement risk, market/FX pricing risk (where applicable), and regulatory reporting. AD banks must maintain strong controls and monitoring.

Bank fees are as per bilateral arrangements between the foreign bank and the Indian AD Cat-I bank (account maintenance, transaction, custody/demat, reporting, etc.).

No. Usage is restricted to permitted transactions under FEMA, RBI circulars, and the Master Directions. Any other end-use requires specific regulatory permission.

Per the underlying trade contract and inter-bank agreements (governing law/jurisdiction). Operational issues are escalated via the maintaining AD bank; regulatory breaches are subject to FEMA/RBI action.

No explicit tax change is stated. Tax implications (withholding, interest income on NCDs/CPs, capital gains) depend on Indian law and any applicable tax treaties. Parties should seek tax advice.