The world is trying to isolate Russia during the war between Russia and Ukraine. On the other hand, India and Russia are growing closer. The two central banks, the Reserve Bank of India (RBI) and the Bank of Russia, will hold an important meeting next week.
The meeting will focus on the bilateral payment system between the two countries. Agreeing to this system will facilitate payments between the two countries and will not violate international sanctions. Sanctions imposed on Russia have been tightening since the start of the war between Russia and Ukraine in late February.
Officials from the central banks may meet next week to discuss opening Loro or Nostro-type accounts. The former is a third-party account where one bank opens an account for another bank in the country. In the second option, the bank opens an account with another bank in the other country. The RBI and the Bank of Russia have not commented. Representatives of SBI, UCO Bank, Bank of Maharashtra, Canara Bank, and IndusInd Bank may also attend the meeting. Apart from this, NPCI and FEDAI officials can also participate.
After Russia and Ukraine, when the world started imposing sanctions on Russia, Russia offered India crude oil. Russia is now the second-largest oil importer to India, despite US and EU sanctions. Russia has now overtaken Saudi Arabia in this regard. India currently imports most of its crude oil from Iraq. Indian refineries bought about 25 million barrels of oil from Russia in May. This is more than 16% of India's total oil imports