'Only Indian bank in Russia' is a JV between SBI, Canara Bank

The country‘s largest bank, the State Bank of India ( SBI),  and mid-sized public sector Canara Bank have a lone joint venture outpost in the conflict zone Russia, facing economic sanctions. 

However, the Indian banks do not have any subsidiaries, branches or representative offices in the war zone. 

The duo’s joint venture in Russia is called Commercial Indo Bank Llc, Moscow, in which the biggest bank owns 60 per cent equity stake, and Canara Bank owns the rest. 

As of January, last year, the total loan exposure was less than Rs 400 crore. However , there could be bank guarantees to businesses, which could be higher, say sources. 

The RBI is already taking a stock of the situation. As per the RBI data , there are no subsidiaries of Indian banks in Russia. Indian banks have two dozen overseas subsidiaries, but in countries like UK, Canada, US, and smaller countries like Kenya, Tanzania, Bhutan etc. 

Similarly, no Indian banks have any branches in Russia. The county wise branches of Indian banks at overseas centres shows a total of 124 branches as on October 31, 2021. 

As per RBI data, the UAE has the maximum branches (17) followed by Singapore (13) , 9 each in Hong Kong and UK and 8 each in US, Mauritius and Fiji Islands. 

In addition, there are also no representative offices of Indian banks in Russia. There are currently 38 representative offices of Indian banks in countries like UAE, UK, Hong Kong etc. 

"The only other way Indian banks could be exposed to Russia -Ukraine is by way of funding to Indian exporters or importers linked to these two countries in the domestic market. In fact , banks have been cautious in lending to companies with heavy reliance in these two countries," say banking sources. 

SBI has reportedly asked its clients to take extra precautions while handling any transactions related to sanctioned countries. In fact, the largest bank has also sought information from domestic oil companies about their exposure to Russia. 

The joint venture entity Commercial Indo Bank calls itself the 'only Indian bank in Russia‘. They operate like a local bank accepting local deposits and also offering term loans, export credit, LCs, housing loans etc. In fact, the joint venture is protected as they raise bulk of their resources especially deposits from the local Russian market. 

Headquartered in Moscow, the commercial Indo Bank has been operating in Russia for nearly two decades.

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