State Bank of India (SBI) has reportedly stopped processing transactions involving Russian entities, which are facing international sanctions following the invasion of Ukraine.

It remains to be seen if this move by the country’s largest bank will have any impact on the bilateral trade between India and Russia, which stood at $9.4 billion so far this fiscal. Other lenders are also likely to follow suit.

A Reuters report said SBI has sent a letter to certain clients asking them to take “extra precautions” while handling any transactions related to sanctioned nations.

“No transactions involving entities, banks, ports or vessels appearing” on a US, European Union or United Nations sanctions list shall be processed irrespective of the currency of the transaction, the report added.

A senior SBI executive told the agency that the lender had a significant international presence and it needs to comply with the US and EU regulations as it is present in those jurisdictions and that the bank cannot be seen as not adhering to these rules.

While there was no official comment from SBI, it is understood that the curb will only apply to fresh transactions and that it will not have any impact on past deals.

Banks like SBI are waiting for more details from the US and other nations on the nature of sanctions against the Russian entities. The domestic lenders are also reportedly waiting for instructions from the Centre on how to proceed with transactions with Russian banks.These development comes after select Russian banks were excluded from the global messaging system SWIFT.

Exporters are already fearing that the sanctions could create difficulties for them. According to Dr A Sakthivel, President, FIEO, the strictures has added to the uncertainty for exporters and the body is now advising them to be in a wait & watch mode as the exact implication of banking & financial sanctions needs to be evaluated. The organisation has requested that the shipments which are at the ports or in the voyage may be quickly cleared and loss to exporters, either during transit or in payment, may be considered by the Government.