India, Russia apex banks to work on payment system this week

Officials of the Reserve Bank of India (RBI) and the Bank of Russia are set to meet this week to give the finishing touches to a bilateral payment system to ensure smooth trade flows between the two nations without violating global sanctions, people familiar with the matter told ET. Russia faces increasingly tighter sanctions after having invaded Ukraine at the end of February.

The two sides will meet to discuss payment solutions such as Loro or Nostro accounts. The first is a third-party account, where a bank holds an account in a country for another bank. The second involves a bank holding an account in another country in another bank.

“We will examine how we can open those accounts in the national currencies of India and Russia,” said one of the persons cited above.

The two-day meeting is likely to be held on Wednesday and Thursday in New Delhi.

Agenda For the Meeting

Besides central bankers, officials from ministries, banks and financial institutions from both sides will also attend.

“The magnitude of such a meeting between two countries is noteworthy although discussions will be extended before both the sovereigns reach a conclusion,” said a person involved in the exercise. The RBI and the Bank of Russia didn’t respond to ET’s queries. Individual institutions couldn’t be contacted immediately for comment.


, , , will likely represent Indian bankers along with the National Payments Corporation of India (NPCI) and the Foreign Exchange Dealers Association of India (FEDAI), said the people cited above.

“People of general manager status are likely to join from our side while finance ministry officials too are expected,” said one of the persons.

Executives of SberBank and VEB Bank Russia are expected to be present along with officials from Russia’s trade and foreign ministries. Bank Otkritie, Novikombank, Bank Rossiya, Promsvyazbank, VEB and VTB Bank are excluded from sanctions, according to the people cited above.

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