SBI seeks oil data to avoid sanction risk

Given its large exposure to the US, SBI aims to avoid penalties

- Utpal Bhaskar

State Bank of India (SBI) is taking all measures to avoid violating US sanctions by inadvertently processing payments for Indian oil refiners that may have purchased Russian oil above the $60 per barrel price cap set by a US-led coalition. To mitigate the risk, India’s largest lender has requested data on purchasing prices from refiners such as Indian Oil Corp., Bharat Petroleum Corp. Ltd, and Hindustan Petroleum Corp. Ltd, two people familiar with the matter said.

Given its significant exposure to the US, SBI aims to avoid any penalties from the US treasury department’s Office of Foreign Assets Control (OFAC). The ban on Russian crude oil came into effect on 5 December for maritime transportation, and 5 February for transportation of all petroleum products. “SBI has asked for a break-up that confirms that Indian refiners are buying oil below the $60 per barrel price cap. They are doing it given the stringent sanctions under the OFAC of the US treasury department. The OFAC directive is agnostic about the currency in which the payments are made, including United Arab Emirates dirhams. As of now, there is no problem," said a government official, one of the two people cited above requesting anonymity.