India, Russia apex banks to work on payment system

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 countries without disregarding worldwide sanctions, people familiar with the matter told ET. Russia faces increasingly tight sanctions after having invaded Ukraine toward the end of February.

The two sides will meet to discuss payment solutions, for example, Loro or Nostro accounts. The first is an outsider record, where a bank holds a record in a country for another bank. The second includes a bank holding a record in one more 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 people referred to above.

The two-day meeting is probably going to be hung on Wednesday and Thursday in New Delhi.

Other than central bankers, officials from ministries, banks, and financial institutions from the two sides will likewise join in.

“The extent of such a gathering between two countries is noteworthy in spite of the fact that discussions will be stretched out before both the sovereigns arrive at a conclusion,” said an individual engaged with the activity. The RBI and the Bank of Russia didn’t respond ET’s queries. Individual foundations couldn’t be contacted immediately for comment.