SRVA & SNRR accounts for global INR transactions: RBI updates FEMA regulations

Solving the real NRI problems

Let’s start with the story of Ravi <changed name>, and how SRVA & SNRR Accounts solved his issues.

Ravi is an NRI entrepreneur based in the UAE, who has been running a textile export business in India for years. Every time he received payments from international buyers, he had to convert them from USD or AED to INR. This process was slow, costly, and unpredictable due to fluctuating exchange rates. On top of that, repatriating funds or reinvesting them in India required additional compliance checks and approvals. 

Yes, more frustrations!

However, in January 2025, as RBI’s latest updates to the FEMA regulations came, Ravi’s big problems were solved. These updates are designed to promote cross-border transactions in INR and other local currencies. These changes allowed non-residents to hold INR accounts overseas, making it easier to conduct transactions in INR without unnecessary conversions. Ravi could now open an INR account abroad, receive payments directly in INR, and use that money freely for investments, business transactions, or remittances.

We will know more about FEMA regulations and the new updates that are making cross-border transactions smoother than ever. But first, if you want to get your own SRVA & SNRR accounts,

Now, to truly understand the significance of this change, let’s take a step back and know more about FEMA, its evolution and India’s efforts to promote INR in global trade.

What is FEMA?

The Foreign Exchange Management Act (FEMA), enacted in 1999, governs foreign exchange transactions in India, replacing the restrictive FERA. It facilitates investments, remittances, and trade while maintaining currency stability. Earlier, NRIs faced high conversion fees, exchange rate risks, and transaction delays due to dependence on foreign currencies. Over the years, the RBI has promoted INR internationalization, introducing Masala Bonds (2015), Special Rupee Vostro Accounts for INR-based trade (2022), and expanding cross-border INR transactions (2023-2025). In 2025, RBI now allows NRIs and foreign entities to hold INR accounts overseas, making global transactions smoother and boosting INR’s role in trade.

What has changed in 2025: RBI’s FEMA updates on SRVA & SNRR Accounts

In January 2025, the RBI introduced significant updates to FEMA, making it easier for NRIs to conduct cross-border transactions in INR. In a significant move to bolster the use of the Indian Rupee (INR) in international transactions, the Reserve Bank of India (RBI) has recently updated its guidelines concerning SRVA & SNRR Accounts. These changes, announced in January 2025, aim to facilitate smoother cross-border transactions and present new opportunities for Non-Resident Indians (NRIs).

The main features of the update include:

1. Overseas branches of Indian Banks can now open INR accounts for Non-Residents

NRIs and foreign entities can now hold INR accounts with Indian banks’ overseas branches. This change makes it easier for NRIs to transact in INR without needing multiple currency conversions.

2. NRIs can use INR account balances for transactions with other non-residents

Balances in SRVA & SNRR Accounts can now be used for legitimate transactions between two non-residents. This means that NRIs can now pay each other directly in INR, making personal and business transactions much more convenient. We will discuss the SRVA & SNRR Accounts in details towards the later part of this blog.

3. NRIs can use their INR accounts for foreign investments, including FDI

NRIs can now use funds in their INR accounts for foreign direct investments (FDI) in non-debt instruments. This opens up new opportunities for NRIs to invest directly in Indian businesses without dealing with foreign currency exchanges.

4. Indian exporters can hold foreign currency accounts abroad

Indian businesses engaged in international trade can now open foreign currency accounts outside India. This will help them settle trade transactions, receive export payments, and use the funds for future imports, making global business operations smoother.

5. Promotion of INR in global trade via SRVA

The Special Rupee Vostro Account (SRVA) was first introduced in July 2022 to promote INR usage in international trade. Since then, several foreign banks have opened SRVAs with Indian banks. Additionally, the RBI has signed agreements with the UAE, Indonesia, and the Maldives to encourage cross-border transactions in local currencies.

What are SRVA & SNRR Accounts?

When doing business in India, non-residents and foreign banks often need a way to hold and manage money in Indian Rupees (INR). The Reserve Bank of India (RBI) has introduced two special types of accounts to make this possible:

1. Special Rupee Vostro Account (SRVA) – For foreign banks to settle trade in INR.
2. Special Non-Resident Rupee (SNRR) Account – For non-residents to conduct business transactions in India.

Let’s understand these accounts in simple terms.

Special Rupee Vostro Account (SRVA)

What is it?

The Special Rupee Vostro Account (SRVA) allows foreign banks to open an INR account with an Authorized Dealer (AD) bank in India. This account helps in settling international trade using Indian Rupees instead of foreign currency. As on Feb 07, 2025, , RBI has permitted 123 Correspondent banks from 30 trading partner countries for opening of total 156 SRVAs with 26 AD (authorised deal) banks in India.

Why is it needed?

Normally, international trade is settled in US dollars (USD), euros (EUR), or other global currencies. However, the SRVA allows two countries to trade directly in INR, reducing dependence on foreign currency and making transactions simpler and more cost-effective.

Who can open this account?

• Only foreign banks from countries that have a trade agreement with India can open an SRVA. These countries include – Bangladesh, Germany, Malaysia, Maldives, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, United Kingdom, and other countries.
• The bank must be financially strong and experienced in handling international trade.
• Approval from the RBI is mandatory before opening an SRVA.

How does it work?

To open an SRVA, the foreign bank and the Indian AD bank must submit:

• A detailed plan explaining how money will be transferred and used.
• A profile of the foreign bank, including financial details and past experience.
• A formal request letter from the foreign bank to the Indian bank.
• A confirmation that the foreign bank follows RBI’s Know Your Customer (KYC) rules, which ensure the bank is trustworthy.
• Proof that the foreign bank is not from a high-risk country, as identified by the Financial Action Task Force (FATF), an organization that fights financial crimes.
• A commitment from the Indian bank to follow all RBI guidelines for transactions.

Fees & Charges

The RBI does not set a standard fee for SRVAs. Each Authorized Dealer bank may have its own charges. It is best to check with the specific bank before opening an account.

What is an SNRR Account?

A Special Non-Resident Rupee (SNRR) Account is a type of bank account in India that allows individuals and businesses from outside India to carry out transactions in Indian Rupees (INR). This account is useful for foreign investors, companies, and financial institutions that need to make payments or receive money in India without converting currency every time.

Why is an SNRR Account Useful?

Many businesses and investors from other countries need an account in India to manage money for trade, investment, or loans (External Commercial Borrowings – ECBs, which are loans from foreign lenders to Indian businesses). The SNRR account offers several benefits:

• Easy INR transactions – Businesses can send and receive payments in Indian Rupees (INR) without the hassle of currency conversion.
• Saves money on exchange rates – Frequent currency conversions can be expensive. This account helps avoid unnecessary costs.
• Send money back easily – The money in this account can be transferred back to the home country without restrictions.
• Follow Indian rules – This account follows all the rules set by India’s central bank (RBI) under the Foreign Exchange Management Act (FEMA), ensuring compliance with regulations.
• No need for an office in India – Foreign businesses can operate in India without setting up a local company.

Who can open an SNRR Account?

• Foreign businesses and individuals who need to make payments or receive money in India.
• Investors from outside India who want to buy or sell assets like stocks, bonds, or real estate in India.
• Foreign companies working on projects in India that do not have a local office but need to manage funds.
• Entities that need to receive tax refunds in India but do not have an Indian bank account.

Special Approval Needed – If you are a citizen or business from Pakistan or Bangladesh, you need special permission from the Reserve Bank of India (RBI) to open this account.

What can you do with an SNRR Account?

• Invest in India – Foreign investors and financial institutions can use this account to buy stocks, bonds, or invest in Indian businesses.
• Make Business Payments – Companies can use this account for trade transactions, paying for goods and services, and handling business expenses.
• Manage Foreign Loans – Companies borrowing money from foreign lenders (ECBs) can use this account to manage loan payments.
• Receive Tax Refunds – Businesses that pay taxes in India but do not have a local account can receive refunds through this account.
• Send Money Back Home – The money in this account can be fully repatriated (sent back to the home country) without restrictions.

What you cannot do with an SNRR Account?

• Deposit foreign currency – This account only holds Indian Rupees (INR).
• Exchange INR for foreign currency – You cannot provide foreign exchange services to Indian residents using this account.
• Transfer money from an NRO account – You cannot move money from an NRO (Non-Resident Ordinary) account into an SNRR account.

Key features and rules of the SNRR Account

• The account must be opened with an Authorized Dealer (AD) Bank, which is a bank approved by RBI for foreign exchange transactions.
• The account can only hold Indian Rupees (INR) and cannot have foreign currency deposits.
• It is valid for up to 7 years, or until the business contract ends, whichever is earlier. If needed, the RBI can approve an extension.
• The funds in this account are fully repatriable, meaning the account holder can send the money back to their home country without restrictions.
• No Interest – Since this is a current account, it does not earn any interest.
• If the account holder moves to India and becomes a resident, the SNRR account must be converted into a regular Indian bank account.

Difference between an SNRR Account and an NRO Account

Also read: How to convert resident account to NRO account

Benefits for Foreign Businesses & Investors

• No Delays in Tax Refunds – Foreign businesses can easily receive tax refunds in India.
• Easy Payments for Trade & Investments – Businesses and investors can manage money in India without setting up a local company.
• Convenient for Temporary Projects – Foreign companies working on short-term projects can use this account instead of opening a full bank account in India.

How to Open an SNRR Account?

Steps to open an SNRR account:

1. Choose an Authorized Dealer (AD) Bank in India that offers SNRR accounts.
2. Provide the necessary KYC (Know Your Customer) documents, details of your business contract, and FEMA compliance documents.
3. Complete the bank’s verification process.
4. Once approved, you can start using the account for business transactions in India.

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Key Considerations for NRIs & Foreign Businesses

Before opening an SRVA or SNRR account, keep these points in mind:

1. Documentation: Ensure all required documents, such as proof of identity, address, and business interest in India, are ready before applying.
2. Regulatory Compliance: Stay updated with RBI guidelines and FEMA regulations to ensure smooth operations.
3. Bank Selection: Choose an Authorized Dealer bank with a strong international presence and experience in handling non-resident accounts.
4. Tax Implications: Understand the tax rules in both India and your home country regarding funds managed through these accounts.

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How these changes benefit NRIs

The latest FEMA updates will have far-reaching benefits for NRIs across different financial activities:

1. Faster & cheaper business transactions

For entrepreneurs like Ravi Kapoor, receiving INR payments directly eliminates conversion fees, delays, and currency fluctuations, making business transactions smoother and more cost-effective.

2. Easier personal transactions between NRIs

NRIs can now transfer INR funds to other NRIs without converting money into foreign currencies, simplifying family remittances and peer-to-peer transfers.

3. Greater investment opportunities

By allowing INR balances to be used for foreign investments and FDI, NRIs now have more investment options without worrying about forex fluctuations.

4. Simplified banking & repatriation

With INR accounts now allowed overseas, NRIs can hold, repatriate, and invest their funds seamlessly, reducing dependency on traditional NRO/NRE accounts.

Closer to a more global INR

The RBI’s FEMA updates on SRVA & SNRR Accounts are a major step toward making INR a more globally accepted currency. By allowing INR transactions abroad, NRIs now have fewer restrictions, lower costs, and better financial control. Whether you are a business owner, investor, or someone managing remittances, these changes will simplify your financial life and make cross-border transactions easier than ever.

If you’re an NRI, now is the perfect time to open an SNRA account and take full advantage of these updates. The future of INR in global trade has just begun!

Frequently Asked Questions (FAQs)

1. What is the biggest benefit of the new FEMA updates for NRIs?

NRIs can now hold INR accounts overseas and settle transactions directly in INR, reducing conversion costs and delays.

2. Can NRIs use their INR account balances for investments?

Yes! NRIs can now invest in foreign direct investments (FDI) and non-debt instruments using their INR account balances.

3. What is the difference between SRVA & SNRR accounts?

SRVA & SNRR Accounts are different.

SNRR is a personal INR account for individual NRIs, while SRVA is used by foreign banks to hold INR for their clients.

4. Can NRIs send INR funds to other NRIs under the new rules?

Yes! NRIs can now transfer INR funds to other NRIs using their SNRR accounts, making personal and business transactions easier.

5. How do these updates impact Indian exporters?

Indian businesses can now hold foreign currency accounts abroad, making trade settlements and international transactions more efficient. SRVA & SNRR accounts have made life easy for NRIs