Russia’s dominant lender Sberbank (SBER.MM) is offering clients “vostro” accounts in rupees at its branches in India, aiming to facilitate clients in carrying out rupee-denominated trade transactions which are increasing due to western sanctions.
Sberbank said on Monday it had obtained permission to open vostro accounts – which a local correspondent bank holds on behalf of a foreign bank – from the Reserve Bank of India (RBI), which earlier this year to put in place a mechanism to facilitate international trade in rupees.
The measure was seen as aiding business ties with Russia in case of more stringent Western sanctions against Moscow.
Following sanctions by the United States and allies after Russia sent tens of thousands of troops into Ukraine in February, Moscow has requested some buyers of its commodities pay using roubles or other currencies rather than the dollar and euro, in which its contracts are typically priced.
“The availability of such accounts is meant to enhance the convenience of serving Russian clients, including banks who plan to conduct transactions in this currency,” Anatoly Popov, deputy chairman of Sberbank’s executive board, said in a statement.
“This is another important step in building a reliable and convenient settlements system between countries by Sberbank, the main provider of rouble-rupee settlements.”
Media outlet Business Today reported earlier on Monday that Sberbank and No. 2 lender VTB (VTBR.MM) had become the first foreign banks to receive permission from the RBI to open vostro accounts for settling trade transactions between Russian and Indian companies in rupees.
VTB declined to comment.