The Indo–Russian payments corridor: Exploring and evaluating cross-border payment alternatives

Neha Vivek Dharurkar, Kanchan Patil, Ameya Makarand Lonkar and Sonali Dharmadhikari
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Neha Vivek Dharurkar: Symbiosis Centre for Information Technology, India
Kanchan Patil: Symbiosis Centre for Information Technology, India
Ameya Makarand Lonkar: Institute of Management and Entrepreneurship Development (IMED), India
Sonali Dharmadhikari: Institute of Management and Entrepreneurship Development (IMED), India

Journal of Payments Strategy & Systems, 2024, vol. 18, issue 2, 116-126

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 (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2024
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