Q. Consider the following statements:
1.Special Non-resident Rupee Accounts (SNRR) accounts are used for domestic trade, whereas Special Rupee Vostro Accounts (SRVA) accounts are used for foreign investments.
2.The Reserve Bank of India’s (RBI’s) approval is required for opening both SNRR and SRVA accounts.
Which of the statement(s) given above is/are correct?
Explanations –
Statements 1 and 2 are incorrect. SNRR accounts are designed for non-residents to facilitate cross-border INR-denominated transactions, including trade with India, foreign investments (like FDI), and external commercial borrowings (ECBs). They are not limited to domestic trade. SRVA accounts are specifically meant for international trade settlements in INR between India and partner countries under bilateral agreements. They are not used for foreign investments. RBI approval is not required to open an SNRR account; these accounts can be opened directly with Authorized Dealer (AD) banks in India. RBI approval is required to open SRVA accounts, as they are part of specific trade agreements between India and foreign partner countries.
Source: AIR
