OREANDA-NEWS. May 17, 2008. Entry of first Indian-owned Russian bank to turn spotlight on Russia’s trade with India and rest of Asia, reported the press-centre of EBRD.

Russia, Kazakhstan, Ukraine, Georgia and Azerbaijan have emerged as the top five countries in terms of trade volumes financed under a EBRD programme set up to simplify and speed up East-West commercial exchanges.

The Bank’s Trade Facilitation Programme (TFP) has provided around ?4 billion in financing since it was set up to jump-start the resumption of normal import and export flows after the Russian financial crisis of 1998.

In terms of transactions, Russia again led with 285 separate deals financed by the TFP, followed by Azerbaijan with 123, Tajikistan with 119, Kazakhstan with 109 and Bosnia Herzegovina with 100. The EBRD ranking covers performance over the last two years in the Bank’s 29 countries of operation and shows that the total volume of transactions financed by the TFP in 2007 rose to ?781 million last year from ?707 million in 2006.

EBRD First Vice-President Varel Freeman will present the Bank’s annual awards to the commercial banks which have shown themselves the most active in the programme during the past year. Also on the sidelines of the EBRD Annual General Meeting taking place in Kiev a new TFP agreement will be signed with the first Indian-owned bank in Russia. The development turns the spotlight on the huge potential in trade between the main emerging markets, the so-called BRIC bloc (Brazil, Russia, India and China).

The EBRD is today extending the equivalent of a \\$20 million revolving TFP facility to Russia’s ICICI Bank Eurasia Limited Liability Company. Known by the acronym IBEL, the Bank is fully-owned by ICICI, India’s second largest commercial bank as measured by assets. IBEL is the 25th Russian bank in the TFP. The multi-currency facility will be available for guarantees and/or cash advances to exporters, importers and distributors of imported goods in Russia.

IBEL supports both Indian and local businesses in Russia and its trade financing so far has focused primarily on trade between Russia, India, China/Hong Kong and other Asian countries. The bank’s entry into the TFP programme will help IBEL’s clients in Russia to develop trade with India and the rest of the world. Annual trade between India and Russia amounts to around \\$3 billion. Nearly a third covers Indian pharmaceutical exports.

Under the TFP, the EBRD has since 1999 been offering unconditional guarantees covering the financial documents issued currently by 115 banks in 19 of the 29 countries in which the Bank is active.

The trade financed by this EBRD programme takes place worldwide, as well as between the 29 EBRD countries of operation themselves. Thanks to a fast-track EBRD approval procedure, paperwork is cut to a minimum, thus speeding up imports and exports. As part of its efforts to facilitate trade transactions, the programme also provides short-term loans to selected banks for on-lending to local exporters and importers.