Banks seek clarity on 'grey areas' from RBI on Rupee Vostro accounts

India has stepped up its purchase of cheaper Russian crude despite international opposition and sanctions. New Delhi is looking to settle this trade in rupees to continue with its purchases

The banks reached out to the Reserve Bank of India (RBI) to seek clarity on legal and regulatory grey areas around proposed rupee Vostro accounts before operationalising them to settle international trade, including that with Russia, the Economic Times reported.

What are Vostro accounts?

A Vostro account is an account that is used in correspondent banking. Here, a foreign bank acts as an agent to provide financial services on behalf of a domestic bank. The account enables domestic banks to provide international banking services to their clients with global needs. 

This account keeps a foreign entity's holdings in