The Reserve Bank is working with the government to thrash out a payment settlement solution for Indo-Russian trade, which is hit by the economic sanctions imposed on Moscow after it invaded Ukraine, but asserted that any such solution will be ‘sensitive’ to the prevailing economic blockade, the central bank said.
RBI Governor Shaktikanta Das was quick to add that it is a matter that the government has to deal with first, and as far as the central bank is concerned, obviously, we will not do anything which goes against the sanctions.
RBI Deputy Governor T Rabi Sankar said since the Ukraine war has disrupted trade and payments, we are discussing with all stakeholders, and at the same time, we are sensitive to the economic sanctions. If and when something is decided, we will announce it.
He also clarified that there is no new payment platform available between New Delhi and Moscow since the war erupted in late February.
Any such payment mechanism involving rupee and rouble payments for imports and exports would help circumvent the sweeping economic sanctions imposed on Russia by the western nations, including freezing many key Kremlin officials’ individual accounts and snapping Russian banks from the international payment gateway SWIFT.
Also, last month, after Russia, which used to supply 14 per cent of global crude demand and 17 per cent of global natural gas before it invaded Ukraine in late February, offered up to 25-27 per cent discount on the pre-invasion price of USD 93 a barrel, Indian Oil had contracted 3 million barrels from Rosneft while BPCL and HPCL have booked 2 million barrels each from the Russian state-owned oil giant.
Sankar further clarified that the central bank is not aware of any formal or informal rupee-rouble payment mechanism, saying industry groups, banks, and everyone concerned are trying to find out how best payments can be facilitated under these changed circumstances. We are discussing all options.
“But, we also have to be sensitive to the sanctions. We are discussing all these alternatives. Once something is finalised you will get to know about it,” Sankar said, adding there is no platform that I am aware of. “There are press reports, but there is nothing that I am aware of. But let me reiterate that anything that we do will be sensitive to the sanctions.” The governor chipped in saying “as and when a mechanism is worked out we will announce it. At the moment, basically, importers and exporters have an issue, and they have represented to government and to us. We are in discussions, but we are also sensitive to the sanctions, and the entire issue is under examination. No decision has been taken yet”.