Indian financial regulators are hesitant to approve initiatives proposed by Sberbank, Russia’s largest bank, aimed at expanding trade in national currencies, the Indian Express reported on Tuesday.
The Indian state-run ECGC Ltd, which is responsible for providing credit risk insurance, has maintained Russia’s ‘high-risk’ rating in its assessment list. This reportedly influences decisions made by regulators, meaning the Indian Securities and Exchange Board has limited Sberbank’s foreign portfolio investor license to trading only in oil and natural gas derivatives.
Additionally, sources revealed that Sberbank’s request to the Reserve Bank of India for a license to export Russian gold bars to India and sell them in national currencies to jewelers was rejected in March due to “supervisory concerns.”
Sberbank has since requested that the government clarify any regulatory issues. The Russian entity argues that the ECGC’s model of risk assessment does not take into account the existence of trade in national currencies, suggesting there is no risk associated with rupee or ruble transactions, as they occur outside the Western financial system.
According to the outlet, Sberbank stated that resolving the issue would facilitate the expansion of rupee-ruble trade, which includes commodity sales and dividend payments to Indian state-run oil and gas companies operating in Russia.
The report follows comments made last month by Anatoly Popov, deputy CEO of Sberbank, who told Reuters that bilateral trade between India and Russia is thriving and that payments are proceeding smoothly. Sberbank, which operates branches in New Delhi and Mumbai, along with an IT hub in Bengaluru, manages up to 70% of all Russian exports to India.
The article also noted that these topics were likely discussed during Prime Minister Narendra Modi’s visit to Russia in July, when the two countries agreed to expand and diversify bilateral trade, setting a new target of $100 billion. In 2023, bilateral trade turnover reached an unprecedented $65 billion, significantly increasing since 2022, mainly on the back of India’s ramped up purchases of Russia oil.
The report comes ahead of the BRICS ministers of finance and central bank governors meeting scheduled for later this week in Moscow. According to RT sources, these issues are also expected to be addressed at the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation, set to take place in Mumbai on November 11. The Indian delegation will be led by Foreign Minister Subrahmanyam Jaishankar, while the Russian side will be headed by First Deputy Prime Minister and Minister for Industry and Trade Denis Manturov.