A senior government official revealed on Thursday that Indian lenders UCO Bank and Yes Bank are in discussions with their Russian counterparts about a payment system for trade between the two nations.
Large lenders are reportedly hesitant to handle direct rupee trade transactions with Russia out of concern that they will be singled out for sanctions due to the invasion of Ukraine, thus New Delhi is relying on smaller banks like UCO and Yes.
According to the official, banks are debating whether to use the Saudi Arabian riyal or the Indian rupee as the payment mechanism’s currency pair.
“A select number of Russian banks have partnered with UCO Bank and Yes Bank. Trade will mostly be conducted on a rupee basis, possibly in roubles or riyals “The official told reporters in New Delhi but declined to give his name.
The representative omitted to elaborate on how the rupee-riyal mechanism will be set up to settle trade between Moscow and New Delhi.