Russia’s Sberbank opens a ‘vostro’ rupee account at India branches by Stocksak

© Stocksak. FILEPHOTO: The logo can be seen in an Sberbank branch in Saint Petersburg, Russia on April 19, 2022. REUTERS/REUTERSPHOTOGRAPHER

MOSCOW (Stocksak). Russia’s largest lender Sberbank offers clients “vostro” accounts with rupees at its branches across India. This is to help clients conduct rupee-denominated trades that are becoming more difficult due to western sanctions.

Sberbank stated Monday that it has been granted permission to open vostro account – which is a local correspondent bank that holds for a foreign bank – from the Reserve Bank of India (RBI). This was a mechanism that facilitates international trade in rupees.

This measure was viewed as aiding business ties to Russia in the event of more stringent Western sanctions against Moscow.

Moscow has asked that buyers of its commodities use roubles and other currencies to pay for its goods, rather than using the dollar or euro as its usual prices, following sanctions imposed by the United States and its allies.

“The availability such accounts is meant increase the convenience of servicing Russian clients, including banks that plan on conducting transactions in this currency,” Anatoly Polepov, deputy chairman, of Sberbank’s executive boards, said in a statement.

“This is another important milestone in building a reliable settlements system between nations by Sberbank. It is the main provider for rouble-rupee Settlements.”

Business Today, a media outlet, reported Monday that Sberbank had been granted permission to open vostro accounts for trade transactions between Indian and Russian companies. VTB, a Russian lender, was the first foreign bank to be granted permission by the RBI to open Vostro accounts to settle trade transactions between Indian and Russian companies in rupees.

VTB declined comment.

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