KOLKATA, Oct 17: With the Reserve Bank of India (RBI) allowing Indian banks to open vostro accounts with Russian banks for trade settlement in the Indian currency, the tea exporters have expressed the view that this a step in the right direction as Russia is a big importer of tea from India.
Historically, Russia had been the largest importer among the CIS block countries with the country lifting 18.55 million kilogrammes in the first seven months of 2022, but the present armed conflict between Russia and Ukraine had taken its toll on tea export volumes as ocean freight had increased and also due to lack of shipping containers.
“Opening up of vostro account is a good step. Anything in that direction is good”, an official of the Indian Tea Exporters Association (ITEA) told PTI. The vostro account will be opened in Indian rupee held with the Russian bank.
The Kolkata-based UCO bank had been facilitating bilateral trade transactions under the rupee payment mechanism since 2012.
The apex bank had permitted trade settlement in Indian rupees and it will be applicable to Russia with whom India’s trade volume last financial year stood at USD 13.1 billion, out of which tea accounted for USD 75.51 million, the official said.
MD&CEO of UCO Bank S S Prasad said, “We have obtained the RBI approval for opening the vostro account”. The bank has already opened the account with Gazprombank of Russia. To a query whether the said account has been made operational, Prasad said “it is not possible to disclose due to customer confidentiality reasons”. (PTI)
