RBI looks for strategy to lessen impact of global sanctions on Russia

New Delhi: The global sanctions on Russian entities following the Ukrainian invasion prompted the Reserve Bank of India (RBI) to think of measures to lessen the impact of sanctions on Indian banks.

The US, the EU, and the UN have already imposed sanctions on Russian entities, including banks, whereby all kind of dealings with these entities has been banned.

Reports suggest that the Finance Ministry has already held discussion with the all stakeholders and further measures will be followed taking stake of the prevailing situation.

India exported $3.33 billion worth of goods to Russia in 2021, including goods like pharmaceutical products, tea, and coffee. When contacted, SBI did not comment on the developments.

India's largest lender, the State Bank of India, has announced that it will not process any transactions involving Russian entities. But sources also said that the announcement of non-cooperation with the Russian entities does not affect the ongoing transactions.

Decision on fresh transactions will likely to be held back for the time.

The new developments following the Russian attacks on Ukraine and the heaped pressure and international sanctions on Russian and its entities will have an adverse impact on Indian economy.

A major part of imports, particularly especially petroleum products and agri commodities, were from Russia. The invasion impact will force India to diversify sources of imports of certain commodities.

There's also talk of revival of rupee payment system for trade with Russia. On the other hand, the RBI will have to tackle the impact of rising crude oil prices on retail inflation. RBI Governor Shaktikanta Das has already indicated that the renewed surge in international crude oil prices will require close monitoring as they pose a risk to domestic inflation.