Russia’s No.2 lender VTB (VTBR.MM) on Wednesday said it had opened a special “vostro” account at its Indian branch that would allow for the more active use of Indian rupees in payments under import and export contracts between Russia and India.
It follows a similar move by Russia’s dominant lender Sberbank (SBER.MM), which on Monday said it was offering clients “vostro” accounts in rupees, aiming to facilitate clients in carrying out rupee-denominated trade transactions which are increasing due to western sanctions.
Both state-run banks have obtained permission to open vostro accounts – which a local correspondent bank holds on behalf of a foreign bank – from the Reserve Bank of India (RBI), which earlier this year to put in place a mechanism to facilitate international trade in rupees.
The measure was seen as aiding business ties with Russia in case of more stringent Western sanctions against Moscow.
Following sanctions by the United States and allies after Russia sent tens of thousands of troops into Ukraine in February, Moscow has requested some buyers of its commodities pay using roubles or other currencies rather than the dollar and euro, in which its contracts are typically priced.
“Today, one of the most important state tasks is the development of direct settlements in national currencies with the aim of strengthening trade and economic ties,” Valeriy Lukyanenko, deputy president of VTB’s management board, said in a statement.