India is considering creating its own SWIFT-style international financial messaging system to introduce rupee settlements in global trade, The Economic Times newspaper reported on Friday, citing people acquainted with the plan
MOSCOW (Pakistan Point News / Sputnik - 28th July, 2023) India is considering creating its own SWIFT-style international financial messaging system to introduce rupee settlements in global trade, The Economic Times newspaper reported on Friday, citing people acquainted with the plan.
The sources told the newspaper that an expert committee is currently reviewing the options and is expected to come out with its findings in August. The committee includes representatives of State Bank of India, Bank of Baroda, Bank of India and Central Bank of India among other experts.
"One of the suggestions was to have an independent financial messaging system that can be used with countries where we have bilateral trade agreements. This committee will now suggest measures on how to make this operational and what are the challenges. Accordingly, the issue will be taken up with other stakeholders, including the Reserve Bank of India," a bank official told the newspaper.
The initiative is part of a larger plan by the Indian government to internationalize the national currency, the sources added.
In November 2021, the Indian government allowed the use of the rupee in international settlements to boost exports. India's commerce ministry said that these changes were made to streamline international trade transactions in rupees, given the growing interest in internationalizing the currency.
In 2022, the Central Bank of India issued a circular on trade settlements between India and other countries. According to it, Indian importers had to make payments in rupees. Payments are credited to a special vostro account in a bank in an exporting country on invoices for services or products from a foreign supplier. Indian exporters were to receive profits in rupees from a balance in the special account.
So far, 20 banks from 22 countries, including Bangladesh, Germany and Russia, have opened 92 special accounts in Indian banks.
