Several economists and bankers thought that the Russia-Ukraine unrest would adversely affect India’s financial condition. However, after taking a deeper look into matters, Indian banks have sighed in relief as they expect minimal impact on our trade financing or business.
The only two Indian banks in Russia are the Canara Bank and the SBI or the State Bank of India. Their joint venture, the Commercial Indo Bank, has a balance sheet of $100 million with the country and a minimum trade value of just above $8 billion. Thus, even if the situation in Ukraine is getting worse, bankers can relax a little bit.
The only aspect they fear getting hampered with is our defense imports from Russia. So, being our largest supplier, their continuous supply will be affected if leading countries like the United States and the United Kingdom impose financial restrictions.
According to a senior banker to a famous public sector bank, there is no considerable impact for now. This is because most of the small trade between Russia and India is processed by Russian lenders with offices in India or multinational banks. Thus, Indian lenders will be more or less safe from the coming volatility.
Read more: https://www.emeriobanque.com/news/russia-ukraine-unrest-unlikely-to-affect-indian-financial-system