Russia is pressing Bangladesh for allowing its Sberbank to establish a liaison or branch office for helping resolve multi-million dollar outstanding payments for the Rooppur Nuclear Power Plant (NPP) and defense equipment.
The proposal was made during recent high-level meetings in Moscow between the Ambassador of Bangladesh and Russian Deputy Foreign Ministers, Mikhail Galuzin and Andrey Rudenka, according to an official document.
The Russian side explicitly linked the Sberbank office to the immediate need to settle hundreds of millions of dollars in overdue payments for Bangladesh's most strategic bilateral projects, sources added.
Following the proposal, the Ministry of Foreign Affairs has formally requested the Bangladesh Bank (BB) to examine Russia's plea and, in consultation with other government stakeholders, take necessary steps to this effect.
The ministry's request has put the central bank in a challenging situation, it was learnt.
While the Sberbank office offers a clear route to resolving the crippling debt crisis with a key development partner, granting a license to a heavily sanctioned entity carries the risk of attracting secondary sanctions from the United States and its western partners, a Bangladesh bank (BB) source said.
The BB will require to make a thorough assessment on the possible regulatory, financial, and geopolitical aspects before granting the necessary approvals, he added
When contacted, a senior official at the Financial Institutions Division (FID) under the Ministry of Finance said the decision involves a high-level geopolitical and economic calculation, weighing the necessity of debt clearance for a key strategic partner against the potential repercussions on Bangladesh's global banking and trade ties.
He further said: "We have received a letter from the foreign ministry to this effect. The FID and BB are working on Russia's proposal. It will take some time to decide on the matter."
The letter has mentioned a definitive solution to a reliable financial channel outside the reach of US and European Union (EU) sanctions, which have effectively cut off Russian banks from the SWIFT international payment system, he mentioned.
The Sberbank, which has been seeking new markets in Asia after withdrawing from its EU operations, has expressed its specific interest in facilitating "legitimate financial transactions" between the two nations.
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