RBI permits commerce transactions with Sri Lanka in INR

By Express News Service

NEW DELHI: Keeping in view the difficulties being skilled by exporters in receiving proceeds from Sri Lanka, the Reserve Bank of India (RBI) has allowed commerce transactions with the island nation to be settled in Indian Rupees (INR), outdoors the Asian Clearing Union (ACU) mechanism.

The settlement of transactions in INR is underneath an association whereby the Indian authorities assured a time period mortgage of $1 billion prolonged by the State Bank of India to Sri Lanka (by way of a credit score facility settlement dated March 17, 2022) for financing buy of important items and providers, similar to meals, medicines, gas and industrial uncooked materials.

Under the association, financing of export of eligible items and providers from India, as outlined underneath the settlement, can be allowed topic to their being eligible for export underneath the Indian Foreign Trade Policy and whose buy could also be agreed to be financed by SBI underneath this settlement.RBI mentioned these directions come into drive with fast impact. The credit score facility underneath the settlement is accessible for draw-down as much as 12 months from the signing date of settlement, that’s, March 16, 2023.

The ACU was established, with its headquarters at Tehran, Iran, on Dec. 9, 1974 on the initiative of the United Nations Economic and Social Commission for Asia and Pacific for selling regional co-operation. The essential goal of the company is to facilitate funds amongst member international locations for eligible transactions on a multilateral foundation, thereby economising on the usage of international alternate reserves and switch prices, in addition to selling commerce among the many collaborating international locations.