Categories: International

RBI allowed trade transactions with Sri Lanka to be settled in Indian rupees

The Reserve Bank of India (RBI) has permitted trade transactions with Sri Lanka to be handled in Indian Rupees (INR), outside the Asian Clearing Union (ACU) mechanism, due to the difficulty faced by exporters in obtaining revenues from the island country. The Indian government guaranteed a term loan of $1 billion granted to Sri Lanka by the State Bank of India to finance the acquisition of vital commodities and services such as food, medicines, gasoline, and industrial raw material.

Buy Prime Test Series for all Banking, SSC, Insurance & other exams

KEY POINTS:

  • Financing of qualified goods and services exported from India, as defined by the agreement, would be allowed under the terms of the agreement, but only if they met certain criteria.
  • As long as they are eligible for export under the Indian Foreign Trade Policy, their acquisition is agreed to be financed by SBI.
  • These directives, according to the RBI, are effective immediately.
  • The credit facility under the agreement can be drawn down for up to 12 months from the agreement’s signing date.

About Asian Clearing Union:

  • The ACU was founded on December 9, 1974, at the request of the United Nations Economic and Social Commission for Asia and the Pacific, to promote regional cooperation.
  • Its headquarters are in Tehran, Iran. The agency’s principal goal is to make payments easier.
  • The agency’s principal goal is to make it easier for member countries to make multilateral payments for qualifying transactions, reducing the usage of foreign exchange reserves and transfer costs while also increasing trade among the countries involved.

Find More International News

Recent Posts

Top-10 Countries with the Highest Number of Women per 100 Men

In many countries around the world, the number of women is either equal to or…

1 hour ago

Shashi Tharoor Biography, Know About His Early Life, Age, Political and Literacy Career

Shashi Tharoor is a well-known Indian politician, writer, public speaker and former diplomat. Born on…

2 hours ago

10 Years of Skill India: How India’s Youth Are Being Future-Proofed!

The Skill India Mission, launched on 15th July 2015, marked a pivotal step toward equipping…

3 hours ago

NASA launches TRACERS Mission to Study Earth’s Magnetic Defense Against Space Storms

NASA has launched the TRACERS mission (Tandem Reconnection and Cusp Electrodynamics Reconnaissance Satellites) to better…

3 hours ago

Alphabet CEO Sundar Pichai Hits $1.1 Billion Net Worth Milestone

Alphabet Inc. CEO Sundar Pichai has officially entered the billionaire club, with his net worth…

3 hours ago

PM Modi Makes History: Breaks Indira Gandhi’s Record as India’s 2nd Longest Serving PM!

On July 25, 2025, Prime Minister Narendra Modi achieved a major milestone by surpassing Indira…

3 hours ago