UCO Bank, YES Bank working with Russian banks on rupee trade settlement

Indian danks are discussing the currency pair for the payment mechanism and the options include the Indian rupee paired with the Russian ruble or Saudi Arabia's riyal

PGurus Newsdesk

October 20, 2022

Indian danks are discussing the currency pair for the payment mechanism and the options include the Indian rupee paired with the Russian ruble or Saudi Arabia's riyal

International trade in rupee: Two Indian banks drag feet on the mechanism

As per a senior government official, Indian lenders UCO Bank and Yes Bank are in talks with their Russian counterparts over a payment mechanism for trade between the two countries.

Months after the Reserve Bank of India (RBI) introduced a mechanism for the settlement of international trade in rupees, two Indian banks have “joined hands” with Russian lenders under the framework.

Banks are discussing the currency pair for the payment mechanism and the options include the Indian rupee paired with the Russian ruble or Saudi Arabia’s riyal, the official said.

Russia’s attack on Ukraine has seen several countries impose sanctions on the former, with the US cutting off Russia’s access to the dollar. This had made Indian companies, looking to take advantage of the lower price of Russian commodities, consider alternative modes of payment for imports. India has increased its imports of crude oil from Russia in recent months.

India had in July announced the new framework which it said aimed to promote the growth of global trade and support rising global interest in the rupee.

Earlier, on September 30, the deputy governor at the Reserve Bank of India had said that India received responses from four to five countries for its mechanism for international trade settlement in rupees, while other nations have also shown interest.

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