The payment infrastructure facilitating settlements in national currencies between Russia and India is now fully operational and ready for active use, announced Ivan Nosov, CEO of Sberbank India. Speaking on September 9 during the INNOPROM exhibition, Nosov highlighted a significant acceleration in transaction times, with more than 90% of payments from Russia to India processed in under 10 minutes. Notably, 30% of these transfers are completed in just one minute.
Nosov emphasized the stability and reliability of this national-currency settlement mechanism for transferring funds between the two nations, noting its resilience against external market fluctuations. This development marks a pivotal step in strengthening financial cooperation.
Overcoming Financial Hurdles
According to the Sberbank India CEO, the new infrastructure addresses and overcomes several challenges that had previously constrained financial collaboration between Russia and India over the past two to three years. These hurdles extended beyond traditional banking operations to encompass areas such as insurance and logistics, which are crucial for smooth bilateral trade.
Boosting Bilateral Trade
The operationalization of this payment system comes as both countries seek to expand trade cooperation and facilitate a greater flow of goods. Nosov pointed to the substantial export potential of Indian products, identifying over 100 categories of Indian goods that have proven successful in international markets and are well-positioned to compete effectively in Russia. Concurrently, the Russian economy continues to demonstrate strong demand for these diverse products.
The availability of faster national-currency settlement infrastructure is expected to significantly support businesses engaged in bilateral trade, providing an efficient and robust mechanism for payments. This announcement gains further significance as it coincides with INNOPROM India in New Delhi, an industrial exhibition positioned as a key business platform ahead of the upcoming BRICS Summit.
Sberbank, Russia’s largest bank, plays a crucial role in the Russian economy, holding almost one-third of the aggregate Russian banking sector assets and serving as a primary lender. The bank is majority-owned by the Government of the Russian Federation through its Ministry of Finance.