SBI Plans Indian Rupee Deposits in Sri Lanka to Support Trade

State Bank of India is planning to introduce Indian rupee-denominated deposits in Sri Lanka, a move aimed at encouraging wider use of the currency in trade and investment between the neighboring nations.

The deposits, which will be offered through SBI’s branches in Sri Lanka, will allow exporters to earn interest on the currency they get from Indian traders, Rizwan Alam, general manager for retail and subsidiaries at SBI’s International Banking Group, told a business forum in Colombo Monday.

India has been the use of the rupee in international trade as part of efforts to expand the currency’s role beyond its borders. The latest initiative by SBI could help deepen the use of the Indian currency in a trade relationship worth more than $6 billion annually.

The Reserve Bank of India has to enhance international acceptance of the rupee like introducing more reference rates. For investors and businesses, greater adoption of the rupee will reduce reliance on the US dollar and lower transaction costs.

Using the Indian rupee to both denominate and settle cross-border trade can reduce transaction costs, Alam said.