What is a Special Rupee Vostro Account and how does it pay Indian exporters?

A Special Rupee Vostro Account (SRVA) lets a foreign bank hold Indian rupees (INR) with a bank in India so that its customers can pay for Indian exports in rupees.¹ For example, a software firm working for a client in a country whose banks hold SRVAs, or a consultant advising a foreign trading company, can be paid in rupees without either side using US dollars.

"Vostro" is a banking term for an account a bank holds for another bank ("your account with us"). For the general idea, see nostro and vostro accounts.

What is a Special Rupee Vostro Account?

A Special Rupee Vostro Account is a rupee account opened by an Authorised Dealer (AD) bank in India for its branch outside India or for a bank resident outside India, under regulation 7(1) of the Foreign Exchange Management (Deposit) Regulations, 2016.¹ RBI describes settlement through an SRVA as "an additional arrangement for invoicing, payment and settlement of exports and imports in INR".¹

• Purpose: invoicing, payment and settlement of trade in rupees.¹
• Relation to foreign currency: the SRVA sits alongside normal foreign currency settlement as an additional arrangement.¹
• Ordinary rupee vostro accounts: RBI's FAQs say existing Rupee Vostro Accounts may not be used as SRVAs because the two are different in nature.³

An exporter uses the SRVA indirectly, through its own AD bank.

Who does the Special Rupee Vostro Account mechanism apply to?

The Special Rupee Vostro Account mechanism involves an Indian AD bank that opens the account, a foreign bank that holds it, and an Indian exporter that is paid from it.¹²

For a client in the US or Europe paying through an ordinary bank, a foreign currency invoice is usually simpler.

How does an Indian exporter get paid through a Special Rupee Vostro Account?

An Indian exporter is paid through a Special Rupee Vostro Account when the foreign client's bank, which holds the SRVA, has the Indian AD bank debit the account and pay the exporter in rupees.² The flow, as RBI first described it in July 2022, is:²

1. Rupee invoice: the exporter and the foreign client agree to invoice in rupees.
2. Client payment: the client pays its own bank abroad, which holds an SRVA with an AD bank in India.
3. Rupee credit: the Indian AD bank debits the SRVA and pays the export proceeds in rupees to the exporter's account.

The 2022 circular said Indian exporters "shall be paid the export proceeds in INR from the balances in the designated Special Vostro account of the correspondent bank of the partner country".² The exchange rate between the rupee and the partner currency is market determined; where there is no direct quote, it is derived through cross rates with major currencies.³

How do you find out if a client's bank has a Special Rupee Vostro Account?

RBI's FAQs say the details of SRVAs can be found under the "SRVA Directory" on the website of the Foreign Exchange Dealers' Association of India (FEDAI).³ A foreign bank may hold more than one SRVA with different AD banks, and an AD bank can open SRVAs for several banks from the same country.³

1. Ask the client about its bank: ask which bank it uses and whether that bank has an SRVA in India.
2. Check the FEDAI SRVA directory: then confirm with your own AD bank.³
3. Agree the rupee invoice: agree the amount and who bears charges on each side.
4. Ask about EDPMS matching: ask your bank how the receipt will be matched to your EDPMS entry.

Settle these points before raising the first rupee invoice.

What FEMA documents and deadlines apply to an exporter paid through an SRVA?

The usual export rules under the FEMA (Export and Import of Goods and Services) Regulations, 2026 apply to an exporter paid through an SRVA, with a twelve-month realisation period for rupee invoices.⁵⁶

See export invoicing in INR for the invoicing side.

What happens to the money held in a Special Rupee Vostro Account?

The foreign bank can use rupee balances in a Special Rupee Vostro Account for permitted purposes. RBI's FAQs say the balance in an SRVA is freely repatriable, can be used for any permissible current and capital account transaction, and that investment in debt instruments follows the Master Direction on Non-resident Investment in Debt Instruments.³

• Reporting: the AD bank in India that maintains the SRVA is responsible for reporting the transactions.³
• Funding: inward remittances, transfers from other repatriable INR accounts, and proceeds of permissible transactions.¹

These points matter to the foreign bank more than to you, but they explain why some foreign banks are willing to hold rupees.

Which RBI rules govern the Special Rupee Vostro Account?

A.P. (DIR Series) Circular No. 19 dated 17 July 2026 governs the Special Rupee Vostro Account; it consolidated and superseded five earlier circulars issued between July 2022 and October 2025.¹

The July 2026 circular sets the main points now in force:¹

Some topics from the 2022 circular, such as advances against exports, set-off and bank guarantees, are not in the July 2026 circular; RBI says AD banks follow the extant instructions on those.¹

What are the common mistakes with Special Rupee Vostro Account payments?

The most common mistake is assuming any rupee vostro account works, when RBI's FAQs say ordinary Rupee Vostro Accounts may not be used as SRVAs.³

• Using the nine-month period: exports invoiced or settled in rupees have twelve months.⁵⁶
• Expecting RBI approval: approval has not been needed since 5 August 2025.⁴
• Skipping the EDF: the 2026 Regulations still require the Export Declaration Form.⁵
• Assuming sanctions no longer apply: an SRVA moves rupees between banks and does not change sanctions rules that may apply to the client, its bank or the transaction. Your bank will screen the payment. See payments from sanctioned countries.

Ask your AD bank to confirm each step before the first rupee invoice goes out.