Public sector UCO Bank has received the RBI’s approval to open a special Vostro account with Gazprom bank of Russia for trade settlement in Indian rupees. It is the first bank to get such approval.
- A Vostro account is an account maintained by a correspondent bank on behalf of another bank. For example, HSBC Vostro account is managed by State Bank of India (SBI) in India. This move will protect the rupee from market volatility. This move will protect the rupee from market volatility. It will also help Russia, as Russia cannot use the SWIFT system due to sanctions.
- SWIFT is a system used by banks for payments in foreign currency. Vostro is derived from the Latin word ‘yours’.
Source- The Hindu
