How Does a Special Rupee Vostro Account Pay Indian Exporters in INR?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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Short answer
A Special Rupee Vostro Account (SRVA) is a rupee account that a foreign bank holds with an Indian AD bank to settle trade in INR. Indian exporters are paid in rupees from the balance in that account. The current RBI rule is A.P. (DIR Series) Circular No. 19 of 17 July 2026.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Indian exporters and importers of goods and services, including freelancers, whose overseas counterparty pays or is paid through a bank that holds an SRVA with an Indian AD bank | A.P. (DIR Series) Circular No. 19 dated 17 July 2026, Regulation 7(1) of the FEMA (Deposit) Regulations, 2016, and Regulations 5(1) and 17 of the FEMA (Export and Import of Goods and Services) Regulations, 2026 | 12 months from invoice (services) or shipment (goods) for exports invoiced or settled in rupees, unless your AD bank extends it | Not applicable as a separate SRVA penalty; unrealised rupee exports follow the general FEMA rules, including the full advance or LC condition in Regulation 13 | 8 Oct 2026 |
What is a Special Rupee Vostro Account and who owns it?
A Special Rupee Vostro Account is a rupee account in India owned by an overseas bank and kept with an Indian AD bank, used to settle exports and imports in INR. The exporter never owns the SRVA. The exporter is paid out of it into their own account in India (Circular No. 19, paras 3 and 4).
- Owner: An AD bank in India may open an SRVA for its own branch outside India or for a bank resident outside India (Circular No. 19, para 3). The legal basis is Regulation 7(1) of the FEMA (Deposit) Regulations, 2016.
- Purpose: Settling cross-border trade through an SRVA is an additional arrangement for invoicing, payment and settlement of exports and imports in INR, and all permissible current and capital account transactions under FEMA may also be settled through it (Circular No. 19, para 4).
- Funding: An SRVA may be funded by inward remittances or transfers from other repatriable rupee accounts, and may hold proceeds of permissible FEMA transactions (Circular No. 19, para 5).
- Surplus: Investment of SRVA balances in debt instruments follows RBI's Master Direction on Non-resident Investment in Debt Instruments, 2025 (Circular No. 19, para 6). RBI's FAQ adds that SRVA balances are freely repatriable (RBI SRVA FAQ, Q8).
- Difference: An SRVA is separate from an ordinary Rupee Vostro Account, and an existing Rupee Vostro Account cannot be used as an SRVA (RBI SRVA FAQ, Q1 and Q3).
- Directory: FEDAI publishes an SRVA Directory listing, country by country, the Indian AD banks that hold SRVAs and their contact details (Circular No. 19, para 7).
Circular No. 19 of 17 July 2026 consolidated and superseded the earlier SRVA circulars, including A.P. (DIR Series) Circular No. 10 of 11 July 2022, which first set up the arrangement (Circular No. 19, paras 1 and 2). Older articles that cite Circular No. 10 describe the history. For the pricing and invoicing side, see invoicing exports in Indian rupees, and for the basic terms see nostro and vostro accounts.
Which exporters and banks can use a Special Rupee Vostro Account?
Any Indian exporter of goods or services can be paid through a Special Rupee Vostro Account if the overseas buyer pays through a bank that holds one with an Indian AD bank. The table shows the role of each party and where other rupee routes apply instead.
| Party or situation | Applicable | Why | Best for |
|---|---|---|---|
| Indian exporter of goods | Yes, paid in INR from the SRVA balance | Exporters are paid export proceeds in INR from the designated Special Vostro account (FTP 2023, para 2.52(d)(ii)) | Goods exporters whose buyer's bank holds an SRVA |
| Indian service exporter or freelancer | Yes, on the same terms as goods | The arrangement covers exports of goods and services (FTP 2023, para 2.52(d)(ii); Circular No. 19, para 4) | Freelancers and agencies billing clients in INR |
| Indian importer | Yes, pays INR into the SRVA | Importers pay INR that is credited to the Special Vostro account of the partner country's bank (FTP 2023, para 2.52(d)(i)) | Businesses that both export and import |
| Overseas bank | Holds the SRVA | Opened for a branch outside India or a bank resident outside India; a foreign bank may hold SRVAs with more than one AD bank (Circular No. 19, para 3; RBI SRVA FAQ, Q4) | Foreign buyers asking how to pay in rupees |
| Indian AD bank | Opens and runs the SRVA | No RBI approval needed since 5 August 2025, and one AD bank can hold SRVAs for several banks from the same country (A.P. (DIR Series) Circular No. 08 of 2025; RBI SRVA FAQ, Q5) | Exporters choosing which bank to work with |
| Buyer in Nepal or Bhutan | Separate rupee rules apply | Trade receipts from Nepal and Bhutan are in Indian rupees under Regulation 3(2)(I)(a)(i) of the Manner of Receipt and Payment Regulations | Exporters to Nepal and Bhutan; see Nepal and Bhutan payment rules |
| Buyer in an ACU member country | ACU mechanism for ACU payments; other transactions as for other countries | Regulation 3(2)(I)(a)(ii) | Exporters to ACU members; see Asian Clearing Union payments |
How do funds flow through a Special Rupee Vostro Account to an Indian exporter?
Funds flow from the overseas buyer to its own bank, then to that bank's Special Rupee Vostro Account in India, and from there to the exporter's account in rupees. The AD bank in India that maintains the SRVA debits it and credits the exporter (FTP 2023, para 2.52(d)(ii)).
- Before quoting in rupees, check the FEDAI SRVA Directory or ask your AD bank whether a bank in the buyer's country holds an SRVA with an Indian AD bank.
- Agree the contract and raise the invoice in Indian rupees.
- For services, file the EDF within 30 days from the end of the month in which the invoice was raised; one EDF can cover all services exported in a month (Regulation 3(2)). See EDF form for exports.
- The overseas buyer instructs its bank to pay the rupee invoice amount.
- The overseas bank funds or uses its SRVA balance with the Indian AD bank to make the rupee payment.
- The Indian AD bank debits the SRVA and credits the exporter in INR, either to the exporter's usual account or to an additional current account kept only for export and import settlement (Circular No. 19, para 4).
- Before crediting, the AD bank satisfies itself that the transaction is genuine and closes or updates the EDPMS entry at the same time (Regulation 4(2)).
- The AD bank maintaining the SRVA reports the transaction (RBI SRVA FAQ, Q14), and every AD bank reports foreign trade transactions in FETERS (Regulation 18(2)).
- Full realisation must happen within twelve months of the invoice or shipment date unless the AD bank grants more time (first and second provisos to Regulation 5(1)).
Which banks hold Special Rupee Vostro Accounts for foreign buyers?
Indian AD banks hold Special Rupee Vostro Accounts on behalf of overseas banks, and FEDAI's SRVA Directory lists them by country with contact details. RBI asks that the directory be updated periodically (Circular No. 19, para 7), so confirm the current position with the listed AD bank before you rely on it.
- The Indian branch of a foreign bank can open an SRVA for its head office or another overseas branch if the Indian branch is an AD bank (RBI SRVA FAQ, Q2).
- A foreign bank may keep SRVAs with several Indian AD banks (RBI SRVA FAQ, Q4).
- RBI removed its approval step on 5 August 2025, so AD banks open SRVAs without referring to RBI (A.P. (DIR Series) Circular No. 08 of 2025).
Can an exporter keep a separate current account for rupee proceeds from a Special Rupee Vostro Account?
Yes, an AD bank that maintains an SRVA may open an additional current account for an exporter or importer, used only to settle export or import transactions (Circular No. 19, para 4). This facility began for exports in November 2023 and was extended to imports in June 2024.
How is the exchange rate set for trade settled through a Special Rupee Vostro Account?
The exchange rate between the rupee and other currencies is market determined (RBI SRVA FAQ, Q6). Where no direct quote exists between the rupee and the partner currency, the rate is derived through a major currency such as USD, EUR or JPY (RBI SRVA FAQ, Q7). Because the transactions are settled in INR, RBI's FAQ says the mechanism reduces exchange rate risk for Indian exporters and importers (Q15).
Do advances and set-off still work for exports settled through a Special Rupee Vostro Account?
Advances and set-off are no longer covered by SRVA-specific rules. Circular No. 19 dropped the advance, set-off and bank guarantee paragraphs of the 2022 circular and tells AD banks to follow the general instructions (Circular No. 19, Annex, item 2). From 1 October 2026 those general rules are the 2026 regulations, which replaced the Master Direction on Export of Goods and Services (Circular No. 20 of 2026, para 4).
- Advance and final proceeds go through the same AD bank unless you inform both banks of a change (Regulation 10(1)). See advance payment against exports.
- Set-off against import payables to the same overseas party or its group companies is allowed within the realisation period (Regulation 7). See set-off of export receivables.
Do rupees received through a Special Rupee Vostro Account count as export of services for GST?
Yes. CBIC has clarified that export proceeds paid in INR from the SRVA of a partner country's correspondent bank meet the payment condition in section 2(6)(iv) of the IGST Act, subject to the Foreign Trade Policy and RBI circulars (CBIC Circular No. 202/14/2023-GST, para 4).
- The CBIC circular refers to the 2022 RBI circular, which Circular No. 19 has since replaced. Confirm the treatment with your tax adviser if a GST officer raises it.
- The other export of services conditions still apply. See export of services under FEMA and GST and what an LUT is.
What documents and deadlines apply to exports paid through a Special Rupee Vostro Account?
Exports paid through a Special Rupee Vostro Account need the same documents and reporting as any export, with twelve months for realisation instead of nine. RBI says documentation and reporting follow the general FEMA guidelines (Circular No. 19, para 7). The table lists each item.
| Document or deadline | What applies | Rule | Best for |
|---|---|---|---|
| Export invoice | Raised in Indian rupees | FTP 2023, para 2.52(d) | All exporters using the SRVA route |
| EDF for services | Within 30 days from the end of the invoice month; one EDF may cover a month's exports | Regulation 3(2) | Service exporters and freelancers |
| EDF for goods | At the time of export; deemed filed with the shipping bill at EDI ports | Regulation 3(1) | Goods exporters |
| EDPMS closure | Closed or updated by the AD bank when it credits the proceeds; invoices up to Rs 10 lakh can close on the exporter's declaration | Regulation 4(2) | Small exporters; see EDPMS closure |
| Realisation period | 12 months from shipment (goods) or invoice (services) when invoiced or settled in rupees | First proviso to Regulation 5(1) | Anyone setting payment terms; see export realisation period |
| Extension | AD bank may extend if satisfied with your reasons | Second proviso to Regulation 5(1) | Exporters whose buyer pays late |
| Reporting | AD bank holding the SRVA reports SRVA transactions; all trade transactions go into FETERS | RBI SRVA FAQ, Q14; Regulation 18(2) | Exporters asking who reports to RBI |
| Other documents | Whatever your AD bank's published export policy lists | AD banks must publish a policy listing documents, timelines and charges (Regulation 19) | Anyone preparing a file for the bank |
What happens if an export paid through a Special Rupee Vostro Account is not realised in time?
If an export paid through a Special Rupee Vostro Account is not realised within twelve months, it stays open in EDPMS and falls outside the FEMA time limit unless your AD bank extends it. The general consequences for unrealised exports then apply (Regulations 5 and 13).
- Extension: Ask your AD bank for more time and give reasons for the delay (second proviso to Regulation 5(1)). See extension of the realisation period.
- Full advance: If proceeds remain unrealised for more than one year beyond the due date or extended date, further exports need full advance or an irrevocable letter of credit (Regulation 13).
- FTP benefits: An exporter who fails to realise proceeds within RBI's time limit must return benefits and incentives availed on those exports (FTP 2023, para 2.54(a)).
- Reduction: Your AD bank may allow a reduction in export value, and for invoices up to Rs 10 lakh it may do so on your declaration (Regulation 6).
- GST: Rupees that arrive outside a route RBI permits may fail the payment condition that CBIC Circular No. 202/14/2023-GST confirms for SRVA proceeds.
Track each rupee invoice against the twelve month date, ask for an extension or reduction before it passes, and keep the buyer's payment advice from its bank on file. Close small invoices up to Rs 10 lakh with the exporter declaration under Regulation 4(2). See export proceeds not realised.
Which RBI rules govern Special Rupee Vostro Accounts?
The main rule is A.P. (DIR Series) Circular No. 19 dated 17 July 2026, which consolidated five earlier SRVA circulars. It works alongside the FEMA Deposit Regulations, the 2026 export regulations, the Foreign Trade Policy and a CBIC GST circular. The table lists each one and its status.
| Circular or regulation | Clause | Date | Plain meaning | Best for |
|---|---|---|---|---|
| A.P. (DIR Series) Circular No. 19 | Paras 3 to 7 and Annex | 17 July 2026 | Current consolidated SRVA rules; supersedes the five circulars below | Anyone checking today's rule |
| A.P. (DIR Series) Circular No. 10 | Paras 1 to 10 | 11 July 2022, superseded 17 July 2026 | Set up rupee invoicing and settlement through SRVAs | Readers of older guides |
| FED Circular No. 08 | Para 2 | 17 November 2023, superseded 17 July 2026 | Additional current account for export settlement | History of the separate account |
| FED Circular No. 11 | Para 2 | 11 June 2024, superseded 17 July 2026 | Additional current account extended to imports | Businesses that also import |
| A.P. (DIR Series) Circular No. 08 | Para 2 | 5 August 2025, superseded 17 July 2026 | SRVAs opened without RBI approval; now in para 3 of Circular No. 19 | Exporters asking why more SRVAs exist |
| A.P. (DIR Series) Circular No. 14 | Para 2 | 3 October 2025, superseded 17 July 2026 | SRVA surplus may also go into non-convertible debentures, bonds and commercial papers issued by Indian companies | Context on foreign banks' use of balances |
| FEMA (Deposit) Regulations, 2016 | Regulation 7(1) | 1 April 2016, as amended | Legal base for deposits AD banks hold for overseas correspondents | Checking the legal basis |
| FEMA 23(R)/2026-RB | Regulations 3, 4, 5(1), 13, 17, 18 | In force 1 October 2026, amended 22 September 2026 | EDF, EDPMS, 12 month realisation for rupee exports, and AD banks follow RBI's rupee settlement framework | Day-to-day compliance |
| Foreign Trade Policy 2023 | Paras 2.52(d) and 2.53(ii) | In force 1 April 2023 | Rupee settlement through SRVAs allowed; rupee-realised exports earn FTP benefits | Goods exporters claiming incentives |
| CBIC Circular No. 202/14/2023-GST | Paras 3.5 and 4 | 27 October 2023 | SRVA rupee proceeds meet the export of services payment condition | Service exporters zero-rating under GST |
What are the common mistakes exporters make with Special Rupee Vostro Accounts?
- Old circular: Quoting Circular No. 10 of 2022 as the current rule. It was superseded on 17 July 2026 by Circular No. 19.
- Own SRVA: Asking your bank to open an SRVA in your name. Only an overseas bank or an AD bank's overseas branch holds an SRVA; the exporter receives rupees from it.
- No bank check: Agreeing a rupee price before confirming that the buyer's bank, or a bank in its country, holds an SRVA with an Indian AD bank.
- Old deadline: Planning around nine months, which applies to exports invoiced and settled in foreign currency, or eighteen months, the rupee figure in the 2026 regulations before the September 2026 amendment. For rupee-invoiced or rupee-settled exports the period is twelve months under the amended 2026 regulations.
- Skipped EDF: Treating a rupee receipt from abroad as a domestic sale and skipping the EDF and EDPMS steps that still apply.
- Approval myth: Believing RBI must approve each new SRVA. That step ended with A.P. (DIR Series) Circular No. 08 of 5 August 2025.
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- RBI A.P. (DIR Series) Circular No. 19, Special Rupee Vostro Accounts (SRVAs), RBI/2026-27/203, 17 July 2026, Paras 1 to 7 and Annex (supersession of earlier circulars; advance, set-off and guarantee paragraphs not carried forward) (checked 8 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 10, International Trade Settlement in Indian Rupees (INR), RBI/2022-2023/90, 11 July 2022 (superseded), Paras 1 to 10, history only (checked 8 Oct 2026)
- RBI FAQ: Special Rupee Vostro Account (SRVA), updated as on 30 July 2026, Q1 to Q10, Q12, Q14 to Q19 (checked 8 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 08, International Trade Settlement in Indian Rupees (INR), RBI/2025-2026/71, 5 August 2025 (superseded), Para 2, opening SRVAs without RBI approval (checked 8 Oct 2026)
- RBI FED Circular No. 08, Opening of additional Current Account for exports proceeds, RBI/2023-2024/86, 17 November 2023 (superseded), Para 2 (checked 8 Oct 2026)
- RBI FED Circular No. 11, Opening of additional Current Account for settlement of trade transactions, RBI/2024-2025/43, 11 June 2024 (superseded), Para 2 (checked 8 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 14, International Trade Settlement in Indian Rupees (INR), RBI/2025-26/91, 3 October 2025 (superseded), Para 2, investment of SRVA surplus in NCDs, bonds and commercial papers (checked 8 Oct 2026)
- Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, amended up to 22 September 2026, Regulations 3(1), 3(2), 4(2), 5(1) and provisos, 6, 7, 8, 10(1), 13, 16, 17, 18(2), 19; footnote 4 (checked 8 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20, Export and Import of Goods and Services, RBI/2025-26/194, 16 January 2026, Para 4 and Annex (Master Directions superseded from 1 October 2026) (checked 8 Oct 2026)
- Foreign Exchange Management (Deposit) Regulations, 2016, Notification FEMA 5(R)/2016-RB, amended up to 29 June 2026, Regulation 7(1) (checked 8 Oct 2026)
- Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023, Notification FEMA 14(R)/2023-RB, amended up to 12 February 2025, Regulation 3(2)(I)(a)(i) and (ii) (checked 8 Oct 2026)
- Foreign Trade Policy 2023, Chapter 2: General Provisions Regarding Imports and Exports (DGFT), Paras 2.52(d), 2.53(ii), 2.54(a) (checked 8 Oct 2026)
- CBIC Circular No. 202/14/2023-GST, Clarification relating to export of services: sub-clause (iv) of section 2(6) of the IGST Act 2017, 27 October 2023, Paras 3.5 and 4 (checked 8 Oct 2026)
- FEDAI SRVA Directory, Country-wise list of AD banks holding SRVAs, with contact details (checked 8 Oct 2026)
Frequently asked questions
Is a Special Rupee Vostro Account the same as an ordinary Rupee Vostro Account?
No, a Special Rupee Vostro Account is a distinct account from an ordinary Rupee Vostro Account. RBI's FAQ says the SRVA is an additional arrangement and that its facilities for permitted investments set it apart. An existing Rupee Vostro Account cannot be converted or used as an SRVA because the two accounts differ in nature.
Can a freelancer use the SRVA route to receive INR from a client abroad?
Yes, a freelancer can receive INR through the SRVA route if the client's bank, or a bank the client can pay through, holds an SRVA with an Indian AD bank. The freelancer invoices in rupees, files the EDF for services, and receives the rupees from the AD bank. The twelve month realisation period then applies.
Where can an exporter find the list of SRVAs held with Indian banks?
An exporter can find SRVAs held with Indian banks in the SRVA Directory on FEDAI's website. RBI's FAQ points to it, and Circular No. 19 says it may be updated periodically. The directory is arranged by country and gives the Indian AD bank's name and contact details, so you can confirm the position directly.
Can money in an SRVA be sent back abroad by the overseas bank?
Yes, RBI's FAQ says the balance in an SRVA is freely repatriable. Income from permitted investments of SRVA balances can also be repatriated, subject to regulatory guidelines and tax rules. The overseas bank may instead use the balance for permissible current and capital account transactions or invest it in debt instruments under RBI's 2025 Master Direction.
Can a buyer in one country pay an Indian exporter from an SRVA funded by another non-resident?
RBI's FAQ says SRVAs can be funded by inward remittances and by transfers from other repatriable INR accounts, and that non-residents may settle bona fide transactions with each other using SRVA balances. Whether a particular third-party payment is acceptable for your export is a decision for your AD bank under Regulation 8 of the 2026 regulations.
Can the INR exposure in an SRVA be hedged by the overseas bank?
Yes, RBI's FAQ says the INR exposure in an SRVA can be hedged in terms of applicable guidelines. The hedging question belongs to the overseas bank that holds the SRVA. An Indian exporter paid in rupees through the SRVA route should ask its AD bank whether any hedging or conversion applies on its side of the payment.
Can merchanting trade be settled through an SRVA?
Yes, RBI's FAQ says merchanting trade transactions can be settled through an SRVA, since all permissible current and capital account transactions under FEMA may be settled through it. The merchanting rules in Regulation 16 of the 2026 regulations still apply, including the six month gap limit between the outward and inward legs.