India’s Top Bank Shuns Russian Oil Payments Despite US Reprieve

State Bank of India is not willing to process payments for Russian oil even after the US government issued a temporary waiver for India’s imports, as the country’s largest lender is uncertain how long the concession will last, according to people familiar with the matter.

The state-owned bank believes that engaging in such business could expose it to risks as it has a sizable loan portfolio in global markets, and also hurt its reputation, said the people who asked not to be identified because the information is private. SBI declined comment to a query from Bloomberg News.

The lender’s stance underscores how short-term easing of US sanctions is doing little to revive financial channels supporting India’s purchases of Russian crude. SBI had refrained from facilitating any transactions tied to Russian oil imports following US sanctions announced on Russia’s two biggest crude oil producers in October, said the people.

But some banks in India were willing to consider financing purchases of Russian oil late last year, provided they were non-blacklisted and sanctions-compliant, people familiar with the matter had said previously. 

SBI’s cautious approach comes as it seeks to safeguard its significant US business exposure amid heightened geopolitical tensions. The US accounted for 26% of SBI’s 6.93 trillion rupees ($75.1 billion) international loan portfolio as at the end of December.