India may propose mutual settlements in local currencies at SCO IBC meeting

India is likely to propose mutual settlements in national currencies of the respective countries in non-oil sectors at the Shanghai Cooperation Organisation Interbank Consortium (SCO IBC) meeting to be held in Goa on Wednesday.

The move will enable the infrastructure projects to be cost-efficient as the import component of the infrastructure projects will become relatively cheap with the settlement in the rupee, a senior official said.  “The idea is to move towards a stronger rupee, and we want the rupee to be accepted in the region,” he said.

The organisation comprises eight member banks from countries such as Russia, India, China, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

India Infrastructure Finance Company Ltd (IIFCL) is set to host the council meeting and the meeting will be chaired by P.R Jaishankar, MD, IIFCL in the presence of delegates from eight member banks and SCO Secretariat.

Another official said, “We are hopeful that it will go a long way in promoting cooperation amongst the member banks in this SCO region to promote the development of infrastructure in each country.

The theme of the meeting will be centred around capacity building, where India will showcase its experience to the regional countries and promote its soft power.,” he added.

A release by IIFCL stated that India is centred on playing an essential part in the agenda and fostering greater collaboration among member states. The 19th Council meeting will be conducive to improving economic relations and strengthening the partnership within the framework of the SCO IBC.

“The meeting will also aim at increasing the fund flows to the infrastructure projects in the region and also discussions will be held on providing finance to the projects in green and sustainable forms of energy which will help India achieve net zero target by 2070. The discussions will also focus on work towards sustainable development goals, and climate finance initiatives, besides sharing the best practices and experiences amongst the member countries,” Business Standard has learnt.

IIFCL is presiding over the presidency of the SCO-IBC during the period of October 26, 2022 to October 25, 2023.

IIFCL was nominated by the Department of Financial Services (DFS), Ministry of Finance to represent India at the SCO-IBC and since then it has been participating in the forum.