“The bank is issuing a circular as it fears any transaction with sanctioned companies or sectors will also result in sanctions.”
“The bank is issuing a circular as it fears any transaction with sanctioned companies or sectors will also result in sanctions.”
India’s largest lender, the State Bank of India, has halted transactions by Russian companies sanctioned by the West over Moscow’s invasion of Ukraine, sources said.
To achieve this, SBI has issued a circular amid concerns that any transaction with sanctioned companies or sectors will also result in a sanction, they added.
No transactions with organizations, banks, ports or ships that are on any US, European Union or United Nations sanctions lists would be processed regardless of the currency of the transaction, they said.
Payments to such entities must be processed through mechanisms other than the bank channel, sources pointed out.
SBI operates a joint venture in Moscow called Commercial Indo Bank Llc, in which Canara Bank has a 40% stake.
The bank has not responded to an email seeking comment on the matter.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government contracts.
Bilateral trade between India and Russia so far this fiscal year is $9.4 billion compared to $8.1 billion in 2020-21.
India’s main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical equipment; electrical machinery and equipment, and fertilizers.
The main exports from India to Russia include pharmaceutical products, electrical machinery and equipment, organic chemicals and vehicles.
Also in the past, India had developed a mechanism to pay for imports from Iran when sanctions were imposed on the Persian Gulf nation.
The Russo-Ukrainian war entered its eighth day on Thursday, with fighting intensifying in Ukraine’s capital Kyiv and other major cities.
Last week, the Group of Seven (G-7) major economies imposed punitive sanctions on the Central Bank of Russia.
They also decided to remove Russian banks from the SWIFT interbank system – which aims to isolate Russia from global trade.
India has so far maintained a neutral stance on Russia’s invasion of Ukraine, urging both countries to resolve the issue diplomatically.
India called for “safe and uninterrupted” transit for all its nationals, including students, who are still stranded in Ukraine and in conflict-affected cities, as it abstained on a UN General Assembly resolution condemning Russian aggression against Ukraine was deplored and reiterated that differences can only be settled through dialogue and diplomacy.
