RBI and Bank of Russia officials discuss payment options

Reserve Bank of India (RBI) and Russian central bank officials met at a hotel in Mumbai on Wednesday to discuss payment options for trade between the two nations, including payment for goods and services in rupees and rubles, three people familiar with the matter. said ET.

Russian central bank officials were due to meet with their counterparts to create a regulatory framework that will help support bilateral business and banking operations despite sanctions imposed on Russia for invading Ukraine, ET reported on March 30.

“Both are still trying to find the right way out,” said one of the people quoted above. “He needs more time to conclude.”

The RBI and the Bank of Russia did not respond to ET’s questions.

It was the first meeting between the two central banks after Russia invaded Ukraine on Feb. 24. Officials assessed the technical barriers faced by exporters and importers in both countries. Central bank officials will consult with their own parties on the parameters to determine the feasibility of different payment options. They will likely meet again to fill in any gaps before arriving at a plan, sources said.

Two senior RBI officials were present at the meeting with Bank of Russia officials, the people quoted above said.

Bilateral trade at the end of February: 12 billion dollars

Russian central bank officials could also meet leaders in New Delhi, they said. “While the Russian delegation was larger than ours, Indian (RBI) officials assessed all aspects of possible solutions as the scenario evolved,” said a senior government official briefed on the incident. evolution.

Russia has been isolated from the Belgium-based SWIFT system, a widely accepted global transaction facilitator. This has caused payment difficulties for companies shipping and receiving goods in Russia.

Lately, India’s exports to Russia have picked up with containers carrying goods such as tea, rice, fruit, coffee, seafood and confectionery shipped last week. Banks run by Russia’s biggest lender, Sberbank, are facilitating the settlement of bilateral trade passing through ports in Georgia, ET reported on April 9.

Two-way trade between India and Russia stood at $11.87 billion at the end of February for FY22, according to Bank of Baroda Economic Research data with Moscow aiming to double that figure in a year or two .

The share of imports from Russia is much larger than offshore shipments from Indian entities.

Earlier in the week, the governor of Russia’s most industrialized state of Ryazan, Lyubimov Nikolay, met with Indian entrepreneurs, including those in the pharmaceutical, entertainment, water treatment and tourism industries, in seeking investment and greater trade.

Pharmaceuticals, tourism, cinema, medical equipment, agriculture, water treatment and construction are the favored areas for potential trade relations, which could well be an alternative to exchanges supported by the dollar. Hindi films, which are popular all over the world, have also been commercially discussed.

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Elaine R. Knight