Summary
· To trade under this mechanism, Tanzanian banks will have to open SRVA in India by approaching authorised Indian banks that will, in turn, approach RBI for their approval with
details of the arrangement, the statement further stated.Dar es Salaam. Tanzania and India can minimise reliance on major global
currencies and foster stable and efficient trading environment by promoting
trade in local currencies, stakeholders have said.
The stakeholders gathered in
Tanzania recently for a consultation meeting organised by the Indian Institute
of Chartered Accountants.
They discussed the implications of
the Rupee Nostro Account System, following the recent announcement of both
countries to commence trading in their respective local currencies.
One of the key advantages
highlighted during the discussion was the reduction in dependency on hard
currencies.
Stakeholders were upbeat that the
system would alleviate the need for constant currency conversions and reliance
on foreign exchange reserves.
Managing director of Bank of India
in Tanzania, Mr Antaryami Sarangi, said the system offers immense potential for
business entities, which can effectively manage their forex balances and
mitigate exchange risks associated with volatile global currencies.
“The banking sector also stands to
gain from implementing this system. Banks could facilitate importers by
providing them with increased flexibility and reduced dependencies on hard
currencies.
“This would streamline trade
processes and enhance the overall efficiency of cross-border transactions,” he
said.
Managing director of Bank of Baroda,
Mr Aditya Narayan Singh, said the arrangment is likely to contribute to lower
transaction costs, which would be beneficial to businesses of all sizes.
“By eliminating the need for
constant currency conversions, settlement times can be significantly reduced
and yield lower transaction costs,” he said.
Indian Deputy High Commissioner, Mr
Shri Manoj Verma, expressed optimism on the prospects for the Rupee Nostro
Account System and its potential in deepening economic ties between Tanzania
and India.
“It will encourage trade partners to
buy more goods and services from each other, thus giving incentive to domestic
industry and exporters and generating employment and income,” he said.
Mr Verma said this could create an
opportunity for local banks and businesses to enjoy payment transactions in
domestic currencies.
In a press release posted on its
website, the Indian High Commission in Dar es Salaam said the Reserve Bank of
India (RBI) had cleared the way for trade using local currencies by allowing
authorised banks in India to open Special Rupee Vestro Accounts (SRVA) in
Tanzania.
To trade under this mechanism,
Tanzanian banks will have to open SRVA in India by approaching authorised
Indian banks that will, in turn, approach RBI for their approval with details
of the arrangement, the statement further stated.
“Tanzania can conserve foreign
exchange, and boost bilateral trade,” he said.
India and Tanzania have bilateral
trade currently valued at nearly $4.5 billion, during an interview with The
Citizen Indian High Commissioner to Tanzania Binaya Pradhan revealed that at
the end of 2023, the trade volume is expected to cross $6 billion.
The Dar es Salaam (Tanzania) Chapter of the Institute of Chartered Accountants
of India (ICAI) was formally inaugurated on January 13th, 2015 as the 26th
overseas chapter of ICAI.
The Chapter conducts CPE programmes
as per ICAI regulations and provides facilities for interaction amongst members
by holding regular meetings and organising talks and lectures of professional
interest and operates principally in Dar city.
The chapter has also signed and
Memorandum of Understanding (MoU) with National Board of Accountants and
Auditors (NBAA)Tanzania in September 2018, where as a part of MoU
Implementation, they assisted NBAA is reviewing their syllabus and course
contents with ICAI New Delhi.
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