Bank guarantees and letters of credit (L/Cs) are becoming more available for transactions between India and Russia as the two countries strengthen their banking ties to bolster bilateral trade.

In the last decade, two major Indian banks have opened in Russia while several Russian banks now have a presence in India.

Bank openings

Indian banks, ICICI and a joint venture comprising State Bank of India (SBI) Canara Bank, which trades as the Commercial Bank of India LLC (CBI), now provide banking services in Russia.

Several Russian banks, including VTB, Sberbank, Vnesheconombank, Promsyvazbank and Gazprombank, have opened representative offices and branches in India.

Trade finance

Since it opened in Moscow, CBI has been offering various trade finance services, including bank guarantees and L/Cs, as well as working capital finance, term loans for equipment and other banking services.

Closer Indo-Russian trade links were given a substantial boost by a visit to India by Russian President Vladimir Putin in 2004, after which several long-term cooperation agreements between leading Indian and Russian credit and financial organisations were signed.

More agreements

India and Russia aim to boost bilateral trade to US$20 billion by 2015, and forging closer banking links between the two countries is seen as an essential part of this ambition.

More agreements to strengthen Indo-Russian banking links are anticipated.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.