The banking regulator is reportedly interested in joining Russia’s financial messaging system in the push towards de-dollarization
The Reserve Bank of India (RBI) is considering the use of Russia’s alternative to the Western SWIFT financial messaging system for rupee-ruble trade settlements, Business Line has reported.
The System for Transfer of Financial Messages (SPFS) was set up by the Russian central bank after the country was cut off from the Belgium-based SWIFT network as part of Ukraine-related sanctions.
According to the report on Tuesday, while discussions with financial institutions are ongoing, India’s banking regulator considers the SPFS a good way of making trade settlements more expedient for both countries.
“There have been meetings between senior officials from the RBI and some public sector banks with their counterparts in Russia on the country’s proposed alternative messaging system for banks. There is a view in the RBI that the proposal is doable,” a source familiar with the discussions told Business Line.
“For national currency trade settlements and quick pay to be more efficient, it is important to have a new transaction facilitating mechanism… Direct settlements in national currencies will not only help in de-dollarization but also lead to cheaper, quicker and more efficient transactions.”
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