Trade settlement in rupee: Fearing sanctions by West, banks seek clarity

Large banks with overseas operations have sought clarity and assurance from RBI that they will not be targeted with sanctions for facilitating rupee trade with a sanction-hit country such as Russia

Banks have raised concerns over the new international trade settlement in rupee, fearing that facilitation of such a mechanism could result in them facing the ire of economic sanctions by the West, people aware of the matter said.

Large banks with overseas operations have sought clarity and assurance from the Reserve Bank of India (RBI) that they will not be targeted with sanctions for facilitating rupee trade with a sanction-hit country such as Russia.

The present payment mechanism is a shift from earlier such arrangements, like the one with sanction-hit Iran, which involved banks facilitating settlement of international trade that did not