RBI working to internationalise Indian rupee

In order to promote the settlement of cross border transactions in Indian Rupees and local currencies, the Reserve Bank has announced a few additional measures. In the ‘Statement on Developmental and Regulatory Policies’ issued on Wednesday, RBI has said that it is essential to make availability and accessibility of Indian rupees to residents of other countries. Accordingly, RBI has decided to allow banks in India and their overseas branches to lend money in Indian Rupees to residents of Bhutan, Nepal and Sri Lanka. Detailed guidelines in this regard will be issued shortly. 
RBI has further proposed to include currencies of India’s major trading partners in the list of reference rates published by Financial Benchmarks India Limited – FBIL. This is expected to further deepen the onshore forex market and encourage banks to quote directly in a larger set of currency pairs, thus eliminating the need for multiple currency conversions and making trade more efficient. Currently, FBIL publishes rates for dollar(USD), Euro (EUR), Pound (GBP) and Japanese Yen (JPY) against INR.
In order to widen the scope of Special Rupee Vostro Accounts, RBI has further decided to allow investment of balance money from  these accounts in corporate bonds and commercial papers. The revised regulations will be notified shortly.The RBI has also expanded investment options for holders of Special Rupee Vostro Accounts (SRVAs), introduced in July 2022 to facilitate invoicing, payments, and settlement of exports and imports in INR. SRVA holders will now be allowed to invest surplus balances not only in government securities and treasury bills but also in corporate bonds and commercial papers. RBI Governor Sanjay Malhotra said the government has been steadily working to internationalise the rupee, making it widely accepted for global trade, finance, and investment. “We have been making steady progress in this regard,” he added.
India’s external sector continues to show strong fundamentals. In Q1 of 2025-26, the current account deficit moderated to USD 2.4 billion (0.2% of GDP), down from USD 8.6 billion (0.9% of GDP) in the same period last year, supported by robust services exports and strong remittance inflows despite a higher merchandise trade deficit. As of September 26, 2025, India's foreign exchange reserves stood at USD 700.2 billion, enough to cover more than 11 months of merchandise imports, providing a strong buffer against external shocks, the RBI governor said.