RBI declares slew of measures to advertise internationalisation of Rupee

In a bid to advertise using home foreign money for cross-border settlements, the Reserve Bank on Wednesday (October 1, 2025) introduced a slew of measures, together with permitting banks to lend in Indian Rupees to non-residents from Bhutan, Nepal and Sri Lanka for bilateral commerce.

Observing that India has been making regular progress in using the Indian Rupee for worldwide commerce, RBI Governor Sanjay Malhotra stated permission has been granted to Authorised Dealer banks to lend in Indian Rupees to non-residents from Bhutan, Nepal and Sri Lanka for cross-border commerce transactions.

Besides, he proposed to ascertain clear reference charges for currencies of India’s main buying and selling companions to facilitate INR-based transactions.

RBI MPC assembly updates on October 1, 2025

RBI has permitted wider use of Special Rupee Vostro Account (SRVA) balances by making them eligible for funding in company bonds and industrial papers.

SRVA is an account opened by a international financial institution with an Indian financial institution to facilitate worldwide commerce settlements straight in Indian Rupees (INR). These measures will assist cut back dependence on the US greenback and thus defend the financial system from sudden change price fluctuations and foreign money crises.

These steps will assist cut back stress on foreign exchange and hold the present account deficit at a cushty stage.

India’s present account deficit moderated to $2.4 billion (0.2% of GDP) in Q1:2025-26 as in contrast with $8.6 billion (0.9% of GDP) in Q1:2024-25 resulting from elevated internet companies surplus and powerful remittance receipts regardless of the next merchandise commerce deficit, Malhotra stated whereas asserting the fourth financial coverage overview.

“During July-August 2025, the merchandise trade deficit continued to remain elevated. Notwithstanding rising global trade uncertainties, India’s services exports, driven by software and business services, witnessed robust growth in July-August 2025,” he stated.

Furthermore, he stated, strong companies exports coupled with robust remittance receipts are anticipated to maintain the present account deficit (CAD) sustainable throughout 2025-26.

As on September 26, 2025, India’s international change reserves stood at $700.2 billion, ample to cowl greater than 11 months of merchandise imports.

Overall, India’s exterior sector continues to be resilient, and RBI stays assured of assembly exterior obligations comfortably, he stated.

“Notwithstanding the robust domestic macroeconomic fundamentals, the INR has witnessed some depreciation accompanied by phases of volatility. RBI is keeping a close watch on movements of the INR and will take appropriate steps, as warranted,” he stated.