Vedyakhin also highlighted Sberbank’s role as a major financier of Indian exports to Russia. With a 500-strong staff, its India arm is leveraging rupee-based mechanisms, such as Special Vostro Accounts, to settle trade and channel investments without relying on third-country currencies.
Mint previously reported that India and Russia were exploring linkages between India’s UPI and the Bank of Russia, as well as integrating India’s RuPay with Russia’s MIR cards.
Below are edited excerpts from the interview:
Sberbank recently announced initiatives to stimulate trade in rupees and roubles. What specific steps are being taken to expand bilateral trade settlements in national currencies?
Alexander Vedyakhin: Our first priority is speed. We’ve ensured that 60% of payments from Russia to India now take less than 10 minutes, and we’re working to increase that share.
To help businesses on a larger scale, our business development project provides services to help companies find suppliers, conduct negotiations, and use flexible financial instruments. Our teams in both Russia and India work together to quickly and accurately match business partners based on client needs.
We also focus on our private clients. Indians working in Russia can conveniently transfer funds home via the Sberbank Online app, with current monthly transfer volumes exceeding 1 billion roubles. We’ve also seen a massive increase (150% per week on average) in payments for Indian students’ education at Russian universities.
For tourists, we’re developing a cashless payment option. We are already testing this solution and expect to provide it to thousands of Russian tourists visiting India by the start of the 2025 tourist season.
Sberbank has been in India since 2010. We’ve grown from a small office to a full-fledged bank offering a full range of financial services. Today, our customer service offices are in Delhi and Mumbai.
We’ve also established a major IT hub in Bengaluru, launched in July 2023 to support our India operations and develop new digital products This centre, which includes its own data processing facility, currently employs over 200 specialists and is set to expand to more than 300. The hub is a key part of our strategy to leverage global tech talent and drive digital innovation
It is reported that Russian oil is being offered at a 5% discount. How does Sberbank facilitate and secure transactions for Indian importers?
Sberbank’s branch in India is a local Indian bank with a local banking license and authorized dealer status of the first category. We are prepared to provide reliable settlements for clients in any industry.
Russia has expressed a willingness to import goods from India if supply channels through the US remain limited. In which sectors do you expect the fastest growth in rupee and rouble trade?
We anticipate a significant increase in trade turnover regardless of the political decisions of third countries. Russia and India have great potential for developing their relationship.
We are improving our logistics and financial infrastructure to create a comfortable business environment in both countries. We expect trade turnover to grow first in mechanical engineering, construction materials, electronics and IT, pharmaceuticals, and agribusiness.
What measures are in place to ensure smoother settlements, risk management, and the scaling of trade infrastructure in rupees and roubles?
What makes Sberbank unique is how closely our independent, licensed branch in India works with our head office in Russia. We are joining forces to develop financial and infrastructure solutions.
For example, when financing Indian exports to Russia, Indian suppliers can now receive payment for their goods immediately without waiting for the contract deferral period to expire. Our branch in India provides the funds by either discounting a letter of credit or issuing a post-shipment loan secured by the Russian buyer’s payment.
As one of Russia’s largest banks, we have a deep understanding of our clients, which allows us to assess risks and make this procedure fast and hassle-free for Indian borrowers.
The Reserve Bank of India (RBI) recently allowed AD-1 category banks to open special rupee vostro accounts (SRVAs) for foreign correspondent banks without prior approval. How does Sberbank use these accounts to facilitate trade?
Sberbank has been actively using SRVA since this financial instrument became available in 2022. The main advantage is the ability to use rupees from Russian exports immediately to purchase Indian goods, make transfers, or invest in India without needing to convert them to roubles or other currencies.
This greatly speeds up payments and transfers, which is crucial for thousands of Indian exporters and for the tens of thousands of Indian migrant workers who send money home to their families every month. For Russian businesses, this fast and reliable SRVA-based payment channel makes India an extremely attractive destination for further trade and investment.
Now that the RBI allows funds in these accounts to be freely invested in government securities and treasury bills, what impact will this have on liquidity and settlement for bilateral trade?
We welcome the gradual liberalization of how SRVA balances can be used. This is primarily aimed at the interests of the Indian economy.
The inclusion of Indian government securities in the J.P. Morgan GBI-EM Global Diversified Index in September 2023 has already increased foreign investors’ interest in the Indian debt market. We expect the RBI’s measures to further increase the rupee’s attractiveness as both an investment vehicle and a means of bilateral settlement.
