New Delhi: Indian banks have suggested to the US Treasury that its advisories to them should be routed via the finance ministry to ensure speedy implementation, people privy to the development said.
Executives from some of the top lenders, including State Bank of India, Punjab National Bank and Canara Bank, met with a six-member US Treasury delegation last month.
The discussions focused on Russian payments and a possible breach of the internationally imposed $60 a barrel purchase price on Russian crude.
At present, the US authorities directly issue advisories to banks that use the international financial messaging system SWIFT, an acronym for Society for Worldwide Interbank Financial Telecommunications, to transfer funds across borders.
The US Office of Foreign Assets Control (OFAC) in many cases routes this communication through correspondent banks.
“These issues are sensitive in nature, and often we get direct advisories where more clarification is required,” said a senior bank executive privy to the deliberations.
“It will be best if finance ministry is involved in these to facilitate and provide clarifications as sometimes these could involve penal charges or other violations.”
Another bank executive said that the round table between Indian banks and US Treasury officials was organised following a request from the external affairs ministry. “One of their major concerns was the possible evasion of Russian oil price cap. We informed them that all Indian banks are adhering to guidelines issued by the Reserve Bank of India and that all such transactions are monitored by relevant authorities,” he said.
Under existing sanctions, G7 countries and their allies have banned tanker operators, insurers and other services firms from facilitating seaborne Russian crude exports if the price is over $60/barrel.
According to an analysis by S&P Global Commodities of Sea and Maritime Intelligence Risk Suite data, non-price-capped tankers have a larger market share in shipping Russia’s Pacific crude exports.
During his India visit in April, US Treasury assistant secretary for economic policy Eric Van Nostrand said that they are continuing to focus on strategies that make it more complicated for Russia to avoid the price cap regime.
