NEW DELHI: Uco Bank and Yes Bank have put in place arrangements with two Russian counterparts as India seeks to step up trade with the sanctioned nation.
While Uco Bank, which was the agency responsible for rupee trade with Iran, has tied up with Gazprom Bank, Yes Bank and Petersburg Social Commercial Bank (PSCB) also have an agreement in place, sources familiar with the discussions said. SBI has also said that it is exploring options of payment arrangements with Russian banks.
Uco Bank and Gazprom Bank are said to have put in place the arrangement after RBI established a mechanism involving the opening of a special vostro account through which payments are to be routed. In absence of a formal arrangement, businesses were routing payments in euros and other currencies, often through the Gulf, which had impacted some of India’s exports. With shipment of goods from Europe and the US hit by sanctions, Indian exporters sense an opportunity in Russia, especially when it comes to sectors such as pharmaceuticals, food products, textiles and telecom equipment. In April-July, exports to Russia have declined by around 30% to $714 million.
