T he Reserve Bank of India (RBI) on Friday allowed standalone primary dealers (SPDS) to borrow in foreign currency from their parent companies and entities it has authorised. They may access overdraft facilities in nostro accounts solely for operational use, the regulator said.
Nostro is a bank account held in another country by a domestic bank, but in the currency of the foreign country.
An SPD dealing in euros would open an account with a bank in the European Union for transaction settlements.
A senior executive with an SPD said the regulator's announcement would aid in managing funding for the foreign exchange business.
As on March 31, 2023, there were seven SDPS registered as non-banking financial companies (NBFCs) with the RBI.
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