E-BRC Generation in DGFT Portal: Understanding Vostro and SRVA Accounts

In the dynamic world of international trade, mechanisms like Vostro and Special Rupee Vostro Accounts (SRVA) play a vital role in enabling smooth foreign transactions. These tools have become especially crucial with evolving global geopolitical scenarios and shifting economic alliances. Let’s break down what these accounts are, how they work, and how they support processes like E-BRC generation in the DGFT portal.

What Are Vostro and SRVA Accounts?

• Vostro Account: This is an account that a domestic bank holds on behalf of a foreign bank in the domestic currency. In simple terms, it’s the foreign bank’s account operated in the domestic bank.

• SRVA (Special Rupee Vostro Account): This is a particular type of Vostro account used to settle international trade in Indian Rupees, rather than global reserve currencies like USD.

How Does a Vostro Account Work? – A Practical Example

Let’s say AG LLC, a company in the USA, wants to pay Royal Export, an exporter in India.

1. AG LLC holds an account in CITI Bank (USA).

2. Royal Export has an account in ICICI Bank (India).

3. ICICI Bank has:

   • A Nostro account in CITI Bank (USA) for holding USD.

   • A Vostro account in INR for CITI Bank (USA) in India.

Flow of Payment:

• AG LLC instructs CITI Bank to send $1000.

• CITI Bank deducts the amount from AG LLC's account and credits it to ICICI Bank's Nostro account in the USA.

• ICICI Bank then transfers the INR equivalent from the Vostro account to Royal Export’s account in India.

This enables smooth cross-border fund flow, supporting trade documentation like the E-BRC (Electronic Bank Realization Certificate) generation on the DGFT portal.

SRVA Account: India’s Trade Innovation with Russia

The Russia-Ukraine war and the resulting sanctions on Russia made global banking systems like SWIFT inaccessible for Russian banks. To maintain bilateral trade, India introduced the SRVA mechanism in July 2022.

Key Highlights:

• No need for USD or SWIFT.

• RBI allowed 9 Russian banks to open Special Rupee Vostro Accounts with Indian banks.

• Major Indian banks involved:

  • UCO Bank – 1 account

  • Sberbank – 1 account

  • VTB – 1 account

  • IndusInd Bank – 6 accounts

This arrangement ensures Indian exporters and importers can continue trade in INR, stabilizing currency exchange risk and trade flow amid global disruptions.

Vostro vs SRVA – The Difference

Conclusion

In the world of global trade, understanding instruments like Vostro and SRVA accounts is essential for exporters, importers, and professionals managing E-BRC filing in DGFT. As international relations shift and traditional banking systems face disruptions, mechanisms like SRVA provide a resilient alternative for sustaining trade and economic cooperation.

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CA M.F. Khan
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