Russia’s Sberbank has no problems transacting with India

Russia’s largest lender, Sberbank, is able to process payments with India without any issues, according to a top executive who spoke to Reuters on Tuesday. Sberbank’s deputy CEO, Anatoly Popov, stated that the bank is a full participant in all Indian payment and interbank systems, and there are no restrictions on its operations.

Despite being sanctioned by the US and the European Commission, Sberbank has adapted to the restrictions by shifting its focus to transactions in rubles and rupees for its trade with India. This transition has allowed the bank to continue processing up to 70% of Russian exports to India. Popov mentioned that the majority of transactions involving these currencies take only a few hours to complete, highlighting the efficiency of this approach.

In contrast, Chinese banks have been cautious about processing payments with Russia due to US secondary sanctions, leading many larger banks to cease such transactions.

The imposition of sweeping sanctions on Moscow following its invasion of Ukraine in 2022 led to a significant increase in business between India and Russia. India has emerged as an “alternative” market for Russia, with Sberbank expanding its presence in the South Asian country by increasing its staff count by 150% this year.

While India has become a major purchaser of Russian oil, there has been a decrease in the demand for Indian products in Russia. The previous issues pertaining to the handling of the Indian rupees received from exports to India have been addressed to some extent, as Russian firms have successfully used the money to pay Indian exporters.