After Microsoft data access row, now SBI halts Nayara Energy transactions over Russian link

India’s largest PSU lender the State Bank of India (SBI) has reportedly stopped processing trade and foreign currency transactions for Nayara Energy, a private oil refiner partly owned by Russia’s Rosneft, amid growing concerns over exposure to US and European Union sanctions. The move follows recent tariff hikes by the US on Indian goods linked to Russian oil trade and the EU’s latest sanctions package targeting entities with Russian energy ties, including Nayara’s Vadinar refinery.

SBI, which has an extensive overseas presence including branches in the US and Europe, is understood to have acted on its own to minimise compliance risks and avoid scrutiny from global regulators. No formal directive has been issued by the Indian government. The bank’s decision is seen as a precautionary step to safeguard its international operations from potential penalties.

The decision adds to the challenges for Nayara Energy, coming soon after technology giant Microsoft Corporation denied the company access to its data services last month over the same issue. Microsoft later restored access after Nayara approached the Delhi High Court to challenge the global IT major’s decision.

Nayara, which accounts for about 8% of India’s refining capacity, now faces fresh hurdles in managing international trade and foreign exchange operations following SBI’s move to halt foreign transactions.

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