Correct Answer : Option (B) - Sri Lanka
Sri Lanka’s Seylan Bank has opened an Indian rupee-denominated Nostro account in Indian Bank in Mumbai. The arrangement will help settle cross-border transactions using Indian rupee between the two nations.
* In a statement, the Sri Lankan bank said the initiative will enable local customers to enter into transactions denominated in the Indian Rupee, eliminating the need to conduct Trade and Remittance transactions in US dollars.
* India has been trying to increase Indian rupee-based trade settlements, which will help the traders on both sides given shortages in Foreign Exchange.
* In an event to promote the use of the rupee in the settlement of transactions held earlier this month, the Indian High Commissioner had said that as a next step, mechanisms need to be created by which Indian tourists can pay in Indian rupees, enabling Sri Lanka to attract more tourists.
* Sri Lanka’s banks have been opening Nostro accounts in India-based banks. Likewise, banks from the Indian side have maintained similar accounts in Sri Lanka for a reciprocal arrangement.
* The state-run Bank of Ceylon carried out its first rupee settlement in December 2022 and has completed transactions of over Rs 1 crore. Similarly, the State Bank of India has started rupee settlements this month, while the Indian bank has been completing similar transactions since January this year...
Source : AIR
