The Central Bank of India approved 34 applications from Russian banks to open accounts in rupees
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The Reserve Bank of India (Central Bank, RBI) has approved 34 applications from various Russian banks to open special rupee (vostro) accounts with 14 Indian commercial lending institutions. Anupriya Patel, Minister of State for Commerce and Industry of India, announced this.
“As of July 2, the RBI approved 34 applications from various Russian banks to open special accounts in rupees in 14 commercial banks in India,” Ms. Patel said at a meeting in the lower house (quoted from BQ Prime).
“Vostro” is an active-passive account, through which transactions are conducted in India in rupees and converted into rubles.
Anupriya Patel noted that due to payment difficulties amid sanctions on major Russian banks, including their disconnection from SWIFT, India’s trade with Russia has suffered. According to her, because of the sanctions, there were problems with insurance and reinsurance coverage, logistics, since large shipping and logistics companies do not serve cargo bound for Russia.
In this regard, according to the minister, the Indian government has taken a number of steps not only to maintain, but also to increase exports to Russia, making payments in national currencies, smoothly putting into operation the International North-South Transport Corridor and the Eastern Sea Corridor (Chennai- Vladivostok).
In the first five months of 2023, the trade turnover between Russia and India increased by 3.8 times and amounted to $27.1 billion. Thus, for the first time Russia was in the top three largest trading partners of India. However, on May 4, Reuters reportedthat India and Russia decided to abandon the settlement mechanism in the Indian national currency because it was unprofitable for Russia – it generated a trade imbalance. Trade between countries continues in US dollars. According to the agency, Moscow wants to be paid in other currencies, including Chinese yuan.
Later Russian Foreign Minister Sergei Lavrov declaredthat Russia is discussing with India how to convert Russian rupees into another currency. He confirmed the information of Reuters that the problem of mutual settlements between Moscow and Delhi in rupees exists, but denied the information about the termination of negotiations on this issue.
More details – in the publication “Kommersant” “The ruble and the rupee lack reciprocity”.
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