Russia’s state-owned development bank VEB and the Reserve Bank of India (RBI) have likely finalized an alternative transaction platform to facilitate bilateral trade after Western sanctions firewalled Moscow’s access to the globally used Swift banking platform, two people familiar with the matter told ET.

The new payments system will likely be installed at the headquarters of both the RBI and the VEB, the latter also known globally as the State Development Corporation.

“India offered a number of such transaction platforms out of which the Russian authorities have accepted a particular network protocol,” said one of the persons cited above.

The new system is likely to be put in place within a week.

VEB and the RBI did not respond to ET’s mailed queries.

The system, seen as an alternative to the Belgium-based SWIFT (The Society for Worldwide Interbank Financial Telecommunication), is likely to ensure seamless transfer of import or export documents for rupee-rouble trades that are settled through the Rupee Debt Account.

VEB is the Moscow-nominated bank that maintains this account with the RBI.

If a Russian importing company gets a consignment from an Indian exporter, VEB (assuming it is the bank for the importer) receives roubles or dollars equivalent to the value from its local importer. It then informs the RBI to debit the same quantum of rupees from the Rupee Debt Account and credit it to the exporter’s Indian bank once the consignment is received in Russia.

All such related documents were earlier generated via SWIFT, which is now out of bounds for Russian lenders due to the economic sanctions.

“Documents and payments can be exchanged via this software, which is billed as an alternative to SWIFT globally,” said an executive with knowledge of the matter.

In 10 months of FY22, India’s exports with Russia totalled $2.85 billion, compared with $7.90 billion worth of imports, data from the Bank of Baroda Economic Research showed.

While payments are stuck on both sides, Letters of Credit issued by any bank on behalf of the importer are facing technical hurdles in absence of consignment documents, dealers said.

Tea, steel, rice and pharmaceuticals are some of the commodities exported to Russia. Defence equipment is one key product area for imports.

While Indian exporters are complaining about not receiving payments, Russian importers may shift orders to Thailand or China if an alternative mechanism is not put in place quickly.

Some large Russian banks with presence in India include VTB, Sberbank and Gazprombank.

Russian central bank officials are expected to meet their counterparts from the RBI to create a regulatory framework that will help sustain bilateral trade and banking operations despite the global sanctions against Moscow, ET reported on March 30. They are also likely to work on the creation of a dedicated payment mechanism to facilitate India’s energy purchases from Russia, said the report.

The proposed meeting of officials from both central banks is likely in the first week of April, said a source.