Trade settlement: Govt says banks free to not deal with sanctioned entities

There are over 200 banks in Russia, and sanctions have not been imposed on all of them

The Centre has told banks that they can exercise their commercial discretion and not deal with sanctioned entities, particularly in the case of Russia, while settling international trade in rupees, people aware of the matter said.

Banks had reached out to the government and the Reserve Bank of India (RBI), expressing their fear that the rupee trade mechanism could result in economic sanctions on them by the West.

Bankers had met top government officials in the Ministry of External Affairs on August 9 and conveyed their apprehensions about the mechanism. During the discussion, the officials allayed their fears, stating that they were