Indian importers undertaking imports via this mechanism will make payment in INR which will be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller.Authorised Dealer Banks in India had been permitted to open Rupee Vostro Accounts (an account that a correspondent bank holds on behalf of another bank).As per the broad framework for cross-border trade transactions in INR under Foreign Exchange Management Act, 1999 (FEMA), all exports and imports under this arrangement may be denominated and invoiced in rupee (INR) and the exchange rate between the currencies of the two trading partner countries may be market determined.However, banks acting as authorised dealers for such transactions would have to take prior approval from the regulator to facilitate this.Recently, the Reserve Bank of India (RBI) has put in place a mechanism to facilitate International Trade in Rupees (INR), with immediate effect. For Prelims: Foreign Trade, Currency Depreciation & Appreciation, Global Sanctions, Balance of Paymentsįor Mains: Effect of global sanctions on economy of India, Benefits and challenges of settling trade in Rupee, Intervention of government in economy Why in News?