Sberbank of Russia has entered into an agreement to finance letters of credit (L/Cs) with one of China's largest regional banks, Harbin Bank.

The move is part of Sberbank's strategy to create a network of financing banks and increase lending limits due to a growing volume of L/Cs between the Russian bank's customers and counterparties in China.

Flexible improvements

The agreement with Harbin Bank aims to provide Sberbank customers importing Chinese goods with improved and more flexible financing terms on import L/Cs.

Harbin Bank was established in 1997 with its headquarters in Heilongjiang Province. It has 17 branches in some of China's largest cities.

National currencies

Sberbank has been working with Harbin Bank since 2014 according to the Russian bank's head of trade finance, Evgeny Kravchenko.

"It's one of the first Chinese banks we started doing business with across trade finance services in national currencies," he said.

Harbin Bank's assistant president, Wang To says Sberbank is one of the Chinese bank's most important strategic partners and has been at the forefront of introducing settlements denominated in the Russian and Chinese national currencies.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.