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Banks huddle with RBI on Russia trade transactions

According to sources, the meeting was meant to take stock of the current situation and no alternative mechanism for processing of transactions was proposed.

RBI
The RBI had earlier sought a status check of Indian banks’ transactions with Ukraine and Russia soon after the war broke out between the two nations.

Senior executives of the Reserve Bank of India (RBI) on Friday held a face-to-face meeting with large banks to discuss the problems they are facing with respect to trade finance transactions with Russian entities. According to sources, the meeting was meant to take stock of the current situation and no alternative mechanism for processing of transactions was proposed.

A few large public sector banks (PSBs) and private sector lenders, along with major foreign banks, are understood to have attended the huddle. Lenders based in other cities were not present at the meeting. A few central bank executive directors were present at the stock-taking exercise.

The government is known to be exploring the option of activating the rupee-rouble trade channel to enable transactions with Russian entities to go through.

Indian banks have temporarily put fresh transactions with Russian entities on hold, as they await the final list of sanctions put out by the US Treasury’s Office of Foreign Assets Control.

The RBI had earlier sought a status check of Indian banks’ transactions with Ukraine and Russia soon after the war broke out between the two nations. Trade in rough diamonds and defence hardware is believed to have been hit worst by the freeze on transactions.

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