Finance

Indian banks likely to designate one branch to deal with Russian business as US sanctions loom: report

Updated : November 27, 2018 08:30 AM IST

According to the report, the move was proposed at a joint meeting between the Indian and Russian-based banks.

Sources told the paper that the chosen bank branches will be more familiar with the interpretation of the sanctions and will in turn help the businesses work around them.

Indian banks likely to designate one branch to deal with Russian business as US sanctions loom: report

Indian-origin banks are likely to allot a branch each to handle all Russia-related businesses following the US sanctions against that country, The Hindu BusinessLine reported, citing sources.

According to the report, the move was proposed at a joint meeting between the Indian and Russian-based banks, which was coordinated by the Indian Banks’ Association (IBA) earlier this month in Mumbai.

Sources told the paper that the chosen bank branches will be more familiar with the interpretation of the sanctions and will in turn help the businesses work around them.

The minutes of the meeting reviewed by the paper said that trade finance has become a big issue for Russian banks as domestic banks stopped processing payments and stopped issuing and/or renewing bank guarantees.

“This not only stalls payments for existing defence contracts — that will eventually lead to delays in deployment of critical defence equipment that India has procured from Russia — but will make participation by Russia suppliers in new tenders almost impossible, thus limiting India’s choice of suppliers to Western players,” sources were quoted as saying in the report.

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