RBI Allows Investment of Special Rupee Vostro Account Balances in Corporate Debt Instruments [Read Circular]
RBI has allowed foreign entities holding Special Rupee Vostro Accounts to invest their surplus rupee balances in corporate debt instruments such as NCDs, bonds, and commercial papers issued by Indian companies.
![RBI Allows Investment of Special Rupee Vostro Account Balances in Corporate Debt Instruments [Read Circular]](https://images.taxscan.in/h-upload/2025/10/06/2094258-rbi-corporate-debt-taxscan.webp "RBI Allows Investment of Special Rupee Vostro Account Balances in Corporate Debt Instruments [Read Circular]")
The Reserve Bank of India (RBI) has permitted the use of surplus balances held in Special Rupee Vostro Accounts (SRVAs) for investment in corporate debt instruments, expanding the investment options available to foreign entities settling trade in Indian Rupees (INR).Through A.P. (DIR Series) Circular No.13 dated October 3, 2025, the RBI directed that Authorised Dealer Category-I (AD-I) banks...
The Reserve Bank of India (RBI) has permitted the use of surplus balances held in Special Rupee Vostro Accounts (SRVAs) for investment in corporate debt instruments, expanding the investment options available to foreign entities settling trade in Indian Rupees (INR).
Through A.P. (DIR Series) Circular No.13 dated October 3, 2025, the RBI directed that Authorised Dealer Category-I (AD-I) banks may allow investments of surplus SRVA balances in non-convertible debentures (NCDs), bonds, and commercial papers (CPs) issued by Indian companies.
Earlier, as per Circular No.10 dated July 11, 2022, SRVA balances could only be invested in Government Treasury Bills and Government securities. With this new provision, foreign traders and financial institutions maintaining SRVAs can now deploy their rupee balances in a wider range of instruments.
The RBI stated that such investments must be made in accordance with the guidelines and limits prescribed in the circular dated October 3, 2025, and must comply with the provisions of the Foreign Exchange Management Act (FEMA), 1999.
The instructions are effective immediately. AD Category-I banks have been advised to inform their constituents and customers about the new facility.
According to the central bank, these directions have been issued under Sections 10(4) and 11(1) of FEMA, 1999, and are without prejudice to any other approvals or permissions required under applicable laws.
This move is expected to offer greater flexibility to foreign entities engaged in INR-based trade settlements and support the development of India’s corporate debt market.
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