SBI ready to open Rs. trade account with Russian banks

State Bank of India, which was earlier reluctant to open rupee trade accounts with Russian banks, seems to have moved forward on this front and is looking for a tie-up with Russian banks. Sources told TNIE that SBI and a few other banks have sought permission from the RBI to open rupee trade accounts with Russian banks.

Earlier, it was reported the SBI was not keen on tying-up with Russian banks to facilitate trade in local currency, fearing sanctions on Russia from the US authorities.

However, it seems pressure from the RBI has brought about the change in SBI’s stance. “SBI will have to look for tying up with a Russian Bank with no sanctions,” an exporter told.

Recently, RBI officials and bankers held a meeting in this regard with finance ministry and commerce ministry officials. TNIE had also reported that the framework for opening up of Vostro accounts has already been laid down by RBI. A vostro account is opened by a domestic bank with a foreign correspondent bank to act as an agent for the domestic bank.