SRVA- Special Rupee Vostro
Account
·
RBI Allows 'Vostro'
Accounts to Invest Surplus in Govt Securities but Also in Corporate Debt Instruments
The Reserve Bank of India (RBI)
has allowed persons
resident outside India (PROIs) maintaining Special Rupee Vostro Accounts (SRVAs)
for international trade
settlement in INR to invest
their rupee surplus balances not only in Central Government securities
but also in corporate debt
instruments — namely, non-convertible
debentures (NCDs)/bonds and commercial papers (CPs) issued by
Indian companies.
Key
highlights:
·
The Master Direction – Non-resident
Investment in Debt Instruments, 2025 has been amended accordingly.
·
Such
investments will be counted
under the corporate debt investment limit for FPIs under the General Route.
·
The minimum residual maturity
and issue-wise investment
limits applicable to FPIs will not apply for SRVA investments.
·
SRVA
holders and
their AD Category-I banks
are responsible for compliance with applicable investment limits.
·
Banks
are required to open
separate demat accounts for SRVA holders’ corporate debt
investments and report
such transactions to SEBI-registered depositories.
·
The
circular takes immediate
effect and has been issued under Sections 10(4) and 11(1) of FEMA, 1999.
[A.P. (DIR Series) Circular No. 13
dated October 03, 2025]
Sub: Investment in Corporate
Debt Securities by Persons Resident Outside India through Special Rupee Vostro account
Attention of Authorised Dealer
Category-I (AD Category-I) banks
is invited to Schedule 1 to the Foreign Exchange
Management (Debt Instruments) Regulations, 2019 notified, vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, and the Foreign
Exchange Management (Deposit) Regulations, 2016 notified, vide Notification
No. FEMA. 5(R)/2016-RB dated April 01, 2016 as amended from time to time and the relevant
Directions issued thereunder. A reference
is also invited to the Master
Direction - Reserve
Bank of India (Non-resident Investment in Debt Instruments)
Directions,
2025 dated January
07, 2025 (hereinafter “Master Direction”).
2. Persons resident outside India that maintain a Special Rupee Vostro Account (SRVA) for international trade settlement in Indian Rupees in terms of A.P. (DIR Series) Circular No. 10 dated July 11, 2022 were permitted to invest their rupee surplus balance in the aforesaid account in Central Government Securities (including Treasury Bills), vide A.P.(DIR Series) Circular no. 9 dated August 12, 2025. It has now been decided
to also permit
investment of these balances in non-convertible debentures/bonds and
commercial papers issued by an Indian
company.
3. The Master Direction has been updated as under:
(a) In paragraph 3 (i) (e) of Part-1, the words “Government Securities” shall be replaced by the words, namely: - “eligible instruments”
(b) In paragraph 4.2 of Part-2,
under the section
‘Note’, after the existing paragraph
(c), the following paragraph,
shall be inserted,
namely: -
“(d) Investments of rupee surplus balances in Special Rupee Vostro
Account in non-convertible debentures/bonds and commercial papers issued by an Indian company
shall be reckoned under the investment limit for corporate debt
securities under the General Route.
(c) In paragraph 7A.2 of
Part-5A, after the words “(including Treasury Bills)”,
the following
words shall be inserted,
namely: -
“and non-convertible debentures/bonds and commercial papers issued by an
Indian company”
(d) In Part-5A, after the
existing paragraph 7A.2, the following paragraph shall be
inserted, namely: -
“Explanation: “non-convertible debentures/bonds issued by an Indian company” and “commercial papers issued by an Indian company” shall mean instruments as specified
respectively at paragraph
1A(b) and paragraph
1A(c) of Schedule 1 to Foreign
Exchange Management (Debt Instruments) Regulations, 2019 notified, vide, Notification No. FEMA. 396/2019-RB dated October 17, 2019.”
(e) In Part-5A, after the
existing paragraph 7A.4, the following paragraph shall be
inserted, namely: -
“7A.4.1 Investments in non-convertible debentures/bonds and commercial papers issued by an Indian
company shall
be in terms of the following:
(i)
The investments shall be subject to the investment limit and stipulations specified for FPI investments under the General Route as set out in paragraphs 4.2 and 4.4 of these Directions respectively.
Provided that the minimum residual maturity requirement as set out in paragraph
4.4 (i) and the issue-wise limit as set out in paragraph 4.4 (iv) of these Directions shall not apply to investments made under
the SRVA route.
(ii) The primary responsibility of complying
with all applicable limits for such investments shall lie with the SRVA holders and the AD Category
– I banks where
these accounts are maintained.”
(f) In paragraph 7A.5 of Part-5A, the words “Central Government securities (including Treasury Bills)” shall be replaced
by the words, namely: - “eligible instruments”
(g) In Part-5A, after the existing paragraph 7A.6.(i), the following paragraph shall be inserted,
namely: -
“(i-a) facilitate opening of separate
demat accounts for SRVA holders for holding
all their investments in non-convertible debentures/bonds and commercial papers
issued by an Indian company”
(h) In Part-5A, after the existing paragraph 7A.6.(iii), the following
paragraph shall be inserted,
namely: -
“(iii-a) report the transactions by SRVA holders
in non-convertible debentures/bonds and
commercial papers issued by
an Indian company to depository(ies) registered with SEBI, for reckoning them under the investment limits for corporate
debt securities under the General
Route”
(i) In
paragraph 7A.6 (v) of Part-5A,
the words “Central Government securities (including Treasury Bills)” shall be replaced
by the words, namely:
- “eligible instruments”
4. These instructions shall be applicable with immediate effect.
5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and
customers concerned.
6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any,
required under any other
law.