Jerusalem: Amid deepening strategic ties and discussions around Free Trade Agreement (FTA) between India and Israel gaining momentum, the State Bank of India (SBI), the only Indian bank with a presence in Israel, is looking to facilitate bilateral trade in Indian rupees.
"In view of India's significant trade flows from/to its partner countries and growing interest among the global trading community to trade in the Indian rupee, it has been envisaged by our banking regulators, i.e. Reserve Bank of India, to permit Indian banks to facilitate settlement of exports and imports of their respective corporate clientele in INR. Israel has been identified as one of the partner countries under this mechanism," CEO of SBI Israel, V Manivannan, told PTI.
Israeli entities undertaking exports/imports through this mechanism shall receive and make payments in INR, which shall be credited into the Special Rupee Vostro Account (SRVA), against invoices for the supply/purchase of goods or services from the Israeli seller/buyer, the SBI executive said. "SBI Tel Aviv has all the requisite approvals in place to facilitate these transactions", he added.
The SBI branch has held several meetings and organised webinars recently in collaboration with the Israel-India Chamber of Commerce to promote trade in rupees. It has also involved most of the major defence entities in Israel in these discussions. With more than 40,000 Indian workers joining the Israeli workforce recently, SBI is also looking to facilitate the flow of remittances to India by facilitating the opening of their NRI accounts in India at its Tel Aviv branch.
"There has been an influx of the Indian workforce in the Israeli labour market, especially in construction and agriculture. SBI Tel Aviv is now facilitating the services for the Indian diaspora by connecting them with NRI accounts facility on the Indian side and exploring collaborating with fintech and local banks to facilitate their INR remittance business," Manivannan said. SBI opened its branch in Israel in 2007 and has since managed to retain a full-fledged operation, demonstrating resilience in the face of the pandemic and more than two years of turmoil in the region due to the ongoing war.
It has a presence in 29 countries through 241 'points of presence' outside India. Situated in the Diamond Exchange in Ramat-Gan, next to Tel Aviv, the SBI Branch caters to local corporates offerings trade finances, bank guarantees for India-related projects, business account and related operations. "As cooperation between India and Israel is on the rise, the branch is already acting as a bridge to facilitate activities. With SBI's vast global network (across all time zones and correspondent relationships across the globe), support from SBI Treasury and connect with India, presents a unique capability and outreach for local corporates dealing with India or any other part of the world," the SBI CEO noted.
The branch is committed to further strengthening the connection with its present and prospective clientele and be a trusted partner in their business endeavours, the executive added. The push for rupee trade comes at a time when both countries are making efforts towards realising the full potential of economic collaboration. External Affairs Minister S Jaishankar visited Israel in December following the visit of Minister of Commerce and Industry Piyush Goyal in November. Israeli Prime Minister Benjamin Netanyahu also spoke to his Indian counterpart Narendra Modi last month, and the two leaders "agreed to meet very soon".
Israeli Minister of Tourism Haim Katz, Minister of Economy and Industry Nir Barkat, Minister of Agriculture and Food Security Avi Dichter, and Finance Minister Bezalel Smotrich visited India during 2025 as the strategic partners build-up momentum to sign a Free Trade Agreement. The two countries signed a Bilateral Investment Treaty (BIT) during Smotrich's visit to India, and a term of reference for an FTA was signed during Goyal's visit to Israel.
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