In a move to internationalise the rupee, the Reserve Bank of India (RBI) is seeking approval from the central government to allow domestic banks and their foreign branches to lend the currency to overseas borrowers for the first time, two sources said. The move aims to enhance the use and acceptability of the local currency in trade.
The proposal, which was sent to the finance ministry last month, suggests lending in rupees to non-residents can begin in neighbouring countries such as Bangladesh, Bhutan, Nepal and Sri Lanka, the sources said.
If successful, such rupee-denominated lending could be extended to cross-border transactions globally, one of the sources said.
