Balances in Special Rupee Vostro Accounts can be used for buying corporate bonds

So far, rupee surplus balance in SRVA account could be invested only in Central Government Securities (including Treasury Bills)| Photo Credit: Dmitriy Razinkov

The Reserve Bank of India (RBI) has expanded investment options for balances held in Special Rupee Vostro Accounts (SRVA), now permitting funds to be directed toward non-convertible debentures, bonds, and commercial papers issued by Indian companies. This development is expected to broaden participation in India’s corporate debt market.

Previously, surplus rupee funds in these international trade settlement accounts were restricted to investments in Central Government Securities, including Treasury Bills.

V Rama Chandra Reddy, Head of Treasury at Karur Vysya Bank, noted that the decision supports the broader internationalization of the rupee while strengthening the corporate debt market and diversifying investment avenues beyond government securities.

Under RBI guidelines issued in July 2022, SRVA balances could already be utilized for trade-related payments, project financing, and investments in government debt instruments within regulatory limits. The new provisions now extend eligibility to corporate debt securities.

Corporate investments made through SRVA accounts will align with Foreign Portfolio Investor (FPI) limits under the General Route, though residual maturity requirements and issue-specific caps won’t apply. SRVA holders and their authorized dealer banks will bear responsibility for compliance with investment ceilings.

Implementation Framework

Authorized Dealer Category-I banks will create dedicated dematerialized accounts for SRVA holders investing in corporate paper. Transaction reporting mechanisms will integrate with SEBI-registered depositories to monitor General Route investment thresholds.

Published on October 3, 2025