New Delhi, March 3
State Bank of India has issued a circular, stopping the processing of transactions of Russian entities sanctioned by the US and its allies.
The circular has been issued to the country’s largest bank over fears that transactions with approved Russian banks and institutions could invite approval.
Indian banks also have to contend with EU, US and some other countries excluding Russian banks from the SWIFT inter-banking system. Any transaction involving entities, banks, ports or ships that appear on the US, EU or UN sanctions list will not be processed, regardless of the currency of the transaction. Payments due to Russian entities have to be processed by other mechanisms rather than through the banking channel.
circular issued
- SBI stops processing transactions of Russian entities sanctioned by the West over Ukraine invasion
- Bilateral trade between India and Russia stood at $9.4 billion so far this fiscal, from $8.1 billion in 2020-21.
SBI operates a joint venture in Moscow called Commercial Indo Bank LLC, where Canara Bank is the second partner with 40 percent stake.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government-to-government contracts.
Bilateral trade between India and Russia stood at $9.4 billion in this fiscal, as against $8.1 billion in 2020-21. India’s main imports are fuels, mineral oils, pearls, precious and semi-precious stones, nuclear reactors, boilers, machinery and mechanical equipment, electrical machinery and fertilisers.
The major items exported from India to Russia are pharma products, electrical machinery and equipment, organic chemicals and vehicles. In the past too, India bypassed similar US-led sanctions to pay for imports from Iran.