The Reserve Bank of India will not violate the economic sanctions imposed on Russia by several countries, Governor Shaktikanta Das said on Friday, reported PTI.

Das was responding to questions about India’s trade with Russia and discussions between the two countries to set up a rupee-rouble payment mechanism.

Several countries, including United States, European Union, United Kingdom and Canada, announced economic sanctions on Russia after it attacked Ukraine on February 24. Several of these measures target Russian state-owned banks and restrict the country’s ability to carry out transactions in major currencies.

RBI Deputy Governor T Rabi Sankar said since the Ukraine war has hurt trade and payments systems, the central bank has been holding discussions with all its stakeholders to find a solution to the disruptions. “And at the same time, we are sensitive to the economic sanctions,” he said.

Bank governor, Das, clarified that no payment mechanism has been set up between New Delhi and Moscow. He added that the central bank will announce when such a mechanism has been finalised.

Reports of India and Russia considering alternative payment mechanisms have emerged in the context of Moscow’s reduced ability to carry out trade in dollars on account of international sanctions. Such a payment mechanism could eliminate the need to settle trade transactions between India and Russia through dollars or euros.

“At the moment, basically, importers and exporters have an issue, and they have represented to the government and to us,” he said. “We are in discussions, but we are also sensitive to the sanctions, and the entire issue is under examination.”.

The United States, European Union, United Kingdom and Canada, among other major countries, have announced economic sanctions against Russia after it invaded Ukraine on February 24. Some of these measures target Russian state-owned banks and restrict the country’s ability to carry out transactions in major currencies.

On Thursday, External Affairs Ministry spokesperson Arindam Bagchi had said that was focusing on stabilising ties with Russia amid the Ukraine conflict and Western countries’ responses to it.

Bagchi had also said that New Delhi has been very open about its engagement with Russia. He made the remarks in response to questions on the growing criticism of India by Western powers on its trade relations with Moscow amid the Russian offensive in Ukraine.

In India’s defence of continuing trade relations with Russia, Bagchi had cited the continuous procurement of crude oil by European countries from Moscow.

“Energy flows to Europe are continuing, fertilisers purchases have been insulated...political colouring should not be attributed to our actions,” Bagchi had said.

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