The West’s announcement about cutting off major Russian banks from the SWIFT payment system is an opportunity for both India and China to deploy the indigenous systems they devised for such an eventuality,
A parliamentary committee has also noted that the privacy of SWIFT has been compromised and that before the crisis escalates, the govt. Needs to improve the existing SFMS (Structured Financial Messaging Solution) for intra-bank message transfer or develop a new one was advised.
North Korea and Iran are other countries already cut off from SWIFT. Russia uses the SPFS system internally, which was developed after the West Threatened to split from the SWIFT system in 2015. For international financial information flow, China will also plan to use the CIPS system, a cross-border payment system in its local currency.
While credit may accumulate in rupee or ruble, sources said New Delhi’s effort would be to keep the slate clean by encouraging Russia to import more Indian goods, other sources of which may be blocked due to US-led sanctions.
