Interest will be given for rupees – Newspaper Kommersant No. 69 (7514) of 04/20/2023
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In the banking market of the Russian Federation, after deposits in UAE dirhams, a deposit appeared in another exotic currency – Indian rupees (INR). In contrast to the deposits in yuan that have already become widespread on the market, deposits in rupees are so far single offers. The rupee is not freely convertible, and unlike the yuan or dirham, its exchange rate against the dollar is not very stable. However, against the background of growing trade with India, clients have accumulated a lot of balances in this currency, and direct correspondent relations with local banks allow generating income that can be shared with clients.
St. Petersburg Social Commercial Bank (PSCB, 96th in terms of assets) launched a fixed-term deposit in Indian rupees from April 19. The minimum deposit amount is INR 100,000 for companies and INR 10,000 for citizens. The term of the deposit is up to 90 days, the rate is 3% per annum.
PSCB started working with the Indian currency in 2016, and in 2022 it was one of the first to open direct correspondent accounts in INR. “This is a country loyal to us, and we see the growth potential of its economy. Dollars and euros are considered dangerous currencies for the Russian Federation, settlements in them through Russian banks are limited,” notes Vladimir Pribytkin, Chairman of the Board of Directors of PSCB. The bank does not disclose absolute volumes.
This week, the head of the Ministry of Industry and Trade, Denis Manturov, said that the trade turnover between Russia and India in 2022 exceeded $35 billion, 2.5 times more than the result of 2021. “Against the background of the growth of trade turnover in rupees, customers have accumulated a lot of balances in this currency. We do not yet proceed from the fact that the new deposit is an extremely profitable commercial offer, but rather a measure to stimulate the preservation of balances in this currency,” Mr. Pribytkin explained. The second possible step is, he said, launching loans in rupees. He cites an analogy with the yuan as an example: “Given that many have turnovers in Chinese yuan, customers are happy to leave yuan in deposits, and sometimes take a loan in this currency.”
He also has not yet seen deposits in INR on the Russian banking market: “To offer such a deposit, you need to have a large number of clients working with India.” If we talk about the profile of clients, then, according to him, these are representatives of medium-sized businesses associated with the production of medicines, food, etc. Recently, client turnover in Brazilian reals and the South African rand has been growing sharply (the bank operates in all currencies of the BRICS countries , however, there are no savings products in these currencies).
At the same time, an increasing number of banks are opening accounts in rupees. In March-April, Soyuz Bank and Absolut Bank reported on this, in particular. It is noteworthy that Commercial Indo Bank operating in the Russian Federation and owned by the state bank of India (works with corporate clients) does not have INR deposits in its lineup.
Banks have already begun to launch deposits in other exotic currencies – for example, the UAE dirham, but the rates for them are minimal (about 1%, see Kommersant on February 9). Since the second quarter of 2022, deposits in Chinese currency have become the most widespread. Today, deposits (or savings accounts) in yuan have a number of both largest and small banks in their lineup (about 50, according to the Sravni.ru website). Rates on them reach 3.65%. Against the backdrop of growing popularity, the volume of loans and deposits in yuan in the system as a whole reached about 1% by the beginning of 2023, according to the Central Bank.
However, the rupee has a number of features. Kommersant’s interlocutor in the foreign exchange market notes that this currency is not freely convertible. He also considers the prospects for lending in Indian currency not obvious. For the past six years, the Indian rupee has been losing ground against the US dollar, declining by more than 22% during this time, and last year alone, the decline was almost 10%. Over the past six months, the Indian currency has been keeping in a narrow range of $0.012-0.0124. On Wednesday, April 19, according to Investing, its rate reached 0.01217, which is 0.6% higher than the values of the end of February.
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