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UCO, YES Bank tie up with Russian banks for payments
September 28, 2022
While Uco Bank, which was the agency responsible for rupee trade with Iran, has tied up with Gazprom Bank, Yes Bank and Petersburg Social Commercial Bank (PSCB) also have an agreement in place, sources familiar with the discussions said. SBI has also said that it is exploring options of payment arrangements with Russian banks.
Uco Bank and Gazprom Bank are said to have put in place the arrangement after RBI established a mechanism involving the opening of a special vostro account through payments are to be routed.
In absence of a formal arrangement, businesses were routing payments in euros and other currencies, often through the Gulf, which had impacted some of India’s exports. With shipment of goods from Europe and the US hit by sanctions, Indian exporters sense an opportunity in Russia, especially when it comes to sectors such as pharmaceuticals, food products, textiles and telecom equipment. In April-July, exports to Russia have declined by around 30% to $714 million.
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