Banks can pay interest on euro a/c for Asian Clearing Union
The Reserve Bank has allowed banks to pay interest to accounts held in euro denomination to settle international payments of India, Pakistan, Iran, Bangladesh, Myanmar, Nepal and Sri Lanka.
By PTI |
MUMBAI: The Reserve Bank has allowed banks to pay interest to accounts held in euro denomination to settle international payments of India, Pakistan, Iran, Bangladesh, Myanmar, Nepal and Sri Lanka.
"It has been decided to allow banks operating in India to pay interest, at their discretion, on ACU (Asian Clearing Union) Euro Vostro accounts in addition to ACU Dollar Vostro accounts maintained by them," the RBI said in a statement here.
The decision to pay interest and the rate at which it will be paid and other conditions will, however, be left to the discretion of each bank, it added.
Vostro accounts are the ones which Foreign banks maintain with any bank in India for the purpose of settling payments.
ACU is an arrangement between the seven nations to settle international payments using the Asian monetary unit as the unit of account.
Euro has been adopted as a settlement currency under the ACU mechanism with effect from January 1 this year.
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Dollar is already the settlement currency under this mechanism and banks are allowed to pay interest on accounts held in this denomination. Download
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