Kazi Zahidul Hasan :
Businessmen have urged the government to explore an alternative payment mechanism in order to keep Bangladesh’s trade relations unhurt with sanctions-hit Russia.
Currently, Bangladeshi exporters are facing payment troubles in doing trade with Russia after the major banks in the Eurasian country disconnected from the SWIFT.
Earlier, the European Union (EU) cut seven Russia’s selected banks from the SWIFT (The Society for Worldwide Interbank Financial Telecommunications) system as part of sanctions over Russia’s invasion of Ukraine.
SWIFT system was blocked for Russia’s second-largest bank VTB, along with Bank Otrkite, Novicombank, Promsvyazbank, Bank Rossiya, Sovcombank and VEB.
“These banks were the main channels for international payments from Russia. But they have been made isolated from
the world by excluding them from SWIFT messaging system,” SM Parvez Tamal, a Russian resident and chairman of NRB Commercial (NRBC) Bank Limited, told The New Nation on Friday.
He said the development could create a potential barrier for growing Bangladesh-Russia bilateral trade. On the other hand, local exporters are now facing problems in getting their payments pending in Russia due to the evolving situation there.
“In this situation, the government should immediately explore alternative arrangement to channel trade transactions from Russia as well to keep Dhaka-Moscow bilateral trade unharmed in wake of Western sanctions.”
He came up with the suggestion that central banks of Bangladesh and Russia should open separate (ruble and taka) accounts for trade settlement. Funds in such accounts act as a guarantee of payment for trade exchanged between two countries.
“Such a proactive move can save the Dhaka and Russia bilateral trade from any erosion,”Tamal added.
In the fiscal year 2020-21, Bangladesh exported goods worth US$665.31 million to Russia and imported goods worth $466.70 million.
Bangladesh-Russia bilateral trade stood at US$1.6 billion, showed the 2020 data of Russia’s Customs.
“There is huge scope for further fostering bilateral trade and commerce between the two friendly countries as both the Russian and the Bangladesh governments are engaged in deep friendship since the independence of the country,” said Parvez Tamal adding that Russia appears to become a potential export market for Bangladeshi apparel products.
He also expressed concern over Russia’s financing in RNPP project as VEB has been blocked from SWIFT messaging system.
VEB is a Russian state-owned financial institution that acts as a development bank and payment agent of the Russian government.
“The government of Russia issues loan to foreign borrowers through the bank. It also sends salaries of its nationals working in a foreign country under a G-to-G deal. So, an alternative payment arrangement is also necessary to keep implementation of RNPP project,” he noted.
“Local exporters have payments pending in Russia are engaged in discussions with the government to work out a mechanism to receive the dues,” said BGMEA presidentFaruque Hassan.
He added, “We have already met foreign and finance secretaries to figure out a way to channel due payment from Russian buyers. We also discussed the matter with buyers.”
When asked, Faruque said they are yet to ascertain the actual amount of dues. But BGMEA has asked its member factories to send information regarding their pending payment and shipment schedules.
“Russia’s exclusion from SWIFT system poses certain but possibly temporary difficulties for payments of Bangladesh’s trade transactions. But we hope traders will find out new payment methods soon,” he added.
Finance Minister AHM Mustafa Kamal on Thursday said that Bangladesh will pursue alternative channels like currency swap to overcome any problem in trading with Russia, hit by US-led sanctions following its invasion of Ukraine.
“We don’t think, the war will last long. If so, we will then think of alternative arrangements,” he told reporters after the two consecutive meetings of cabinet committee on economic affairs (CCEA) and cabinet committee on public purchase (CCPP).
