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The Indo–Russian payments corridor : Exploring and evaluating cross-border payment alternatives
Journal of Payments Strategy & Systems,
18
(2),
116-126
(2024)
Abstract
In response to the Russian invasion of Ukraine, western countries have imposed a number of economic sanctions on Russia, including freezing its foreign currency reserves, restricting the flow of trade and cutting off its access to SWIFT. The sharp fall in euro and US dollar denominated transactions has in turn impacted Russia’s trade with India, as it is now harder for the two countries to exchange payments. In this context, this paper explores the messaging, clearing and settlement alternatives available for making/receiving payments between India and Russia. Specifically, the paper examines a rupee–ruble trade arrangement, central bank digital currency, the linkage of faster payment systems and card infrastructures, the Russian System for Transfer of Financial Messages, and bilateral messaging systems. In addition, the authors evaluate various considerations pertaining to these options, as well as the implications, from the perspective of central banks, banks and merchants/customers.
Keywords: Rupee–Ruble Pact; CBDC; faster payments linkage; cross-border payments
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Author's Biography
Neha Vivek Dharurkar is a chartered accountant, cost and management accountant, and a company secretary. She is currently a research scholar at the Symbiosis Centre for Information Technology at Symbiosis International (Deemed University) and a manager in the payments transformation practice at PricewaterhouseCoopers. She has over ten years of experience in the banking and payments domain, including in such areas as strategy consulting, risk advisory, process improvement and business build-out. She has conducted training programmes in the domain of banking and financial services, both nationally and internationally.
Kanchan Patil is a deputy director of the Symbiosis Centre for Information Technology at Symbiosis International (Deemed University). Her area of expertise is marketing and information communication technology. She teaches subjects like Industry 4.0, digital transformation, the internet of things and edge computing, computing tools and marketing management, consumer behaviour and services marketing. She has completed a minor research project funded by the Indian Council of Social Sciences Research, and her research has been published in various peer-reviewed journals.
Ameya Makarand Lonkar is a research scholar at Bharati Vidyapeeth University, where he is pursuing a PhD in the domain of digital payments. He is a Qualified Chartered Accountant and is currently associated with MVL Consulting Private Ltd, where he is a director within its Advisory and Training practice. He has previously worked for Ernst and Young (Advisory Services) and has conducted training for multinational IT companies and banks in such fields as digital payments, financial crime and compliance, and other areas in the domain of banking, financial services and insurance.
Sonali Dharmadhikari is Head of the Department for Finance at Bharati Vidyapeeth University. She is also a Qualified Cost and Management Accountant and serves on the review board of the Academy of Marketing Studies Journal. Her research papers have been published in a number of journals in India.
