According to sources in the banking sector, the Reserve Bank of India (RBI) has given HDFC Bank and Canara Bank permission to open special Vostro accounts for rupee commerce with Russia. The other three Indian banks that have acquired regulatory approval for this type of transaction are UCO Bank, Union Bank, and IndusInd Bank. Aside from that, the RBI has approved Sber Bank and VTB, two Russian banks. In India, both have branches.
Although no transaction has been completed via this system, sources claim that three banks have created accounts thus far. The initiative aims to boost local currency trade. The RBI first granted permission to Kolkata-based UCO Bank to register a unique Vostro account with Russia’s Gazprombank, which was established by the largest gas producer and exporter in the world, Gazprom.
The remaining four Indian banks each partner with one Russian bank, whereas IndusInd Bank has agreements with six Russian banks. MTS Bank, the fintech division of MTS, Russia’s largest mobile network, is HDFC Bank’s equivalent in that country. The RBI had published a circular on July 11 permitting rupees to be used for international trade settlement. The Russian ruble is equivalent to Rs 1.35.
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