27 March 2024

On 25 January 2024, the Central Bank of Myanmar (“CBM”) issued guidelines on payment procedures for using the special rupee vostro account (“SRVA”) in India-Myanmar bilateral trade (“Guidelines”), framed within the legal framework of the Foreign Exchange Management Law.

The Guidelines cover both border and normal trade between Myanmar and India and utilise the SRVA facilitated by Punjab National Bank in New Delhi and its Yangon representative office. The Guidelines set out the process to be followed by designated banks including:

  • Designated banks must have SRVAs at PNB (New Delhi);
  • Myanmar-designated banks must open an Indian rupee account for the importer/exporter under the SRVA;
  • Indian rupee accounts can only be used for export earnings from India and import payments settled to India; and
  • Import payments and resale activities through Indian rupee accounts of importers/exporters must comply with directives from CBM’s Foreign Exchange Supervisory Committee.

The Guidelines also outline provide for methods to replenish funds in local designated banks’ SRVA, convert excess Indian rupees in the SRVA to other foreign currencies, transfer funds among SRVA of local banks, and arrangements for Indian rupee liquidity support if needed.