CURRENT AFFAIRS

Detailed explanation-1: -The Reserve Bank of India (RBI) on Monday allowed HDFC Bank Ltd and Canara Bank Ltd to open a special “vostro account” for trade in Rupees with Russia, according to media reports. Vostro accounts are accounts a bank holds on behalf of another, often foreign bank, and this forms a key part of correspondent banking.

Detailed explanation-2: -A total of nine Indian banks have approval to open 17 special vostro rupee accounts for overseas trade with Russia. These are: UCO Bank, Indian Bank, HDFC Bank, YES Bank, IndusInd Bank, IDBI Bank, Canara Bank, Union Bank of India and SBI.

Detailed explanation-3: -Twenty Russian banks, including Gazprom, Rosbank, Tinkoff Bank, Centro Credit Bank and Credit Bank of Moscow, have opened rupee vostro accounts with authorised dealer banks in India to enable rupee trade between the two countries, but the mechanism is yet to take off in a big way, officials have said.

Detailed explanation-4: -A vostro account is a bank account held by a domestic bank for a foreign bank, denominated in the domestic currency of the former. The Rupee Vostro Account specifically holds the foreign entity’s deposits in Indian rupees at the Indian bank.