At a time when the West has imposed sanctions on Russia following its invasion of Ukraine, the Reserve Bank of India’s (RBI) former governor Raghuram Rajan on Tuesday called for a more systematic procedure for imposing sanctions.

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Rajan said, the procedure to impose sanctions should be multilateral and as depoliticised as it can be.

“Situation today raises questions on how safe India’s reserves stored in other countries are. Have to develop systems after this crisis to give people confidence that their reserves in other countries are safe,” he told CNBC-TV18 in an exclusive interview.

His remarks come at a time when reports suggest the European Commission has prepared a new package of sanctions against Russia and Belarus over the invasion of Ukraine that will hit additional Russian oligarchs and politicians and three Belarusian banks.

Also Read | Raghuram Rajan: Ukraine-Russia war could have long-term impact on already-high inflation

When India did business with Iran when it was under sanctions, it used one bank that did not have much business elsewhere. The fear is doing business with a sanctioned entity could lead to penalties through the legal or financial system, RBI’s ex-governor said.

He added that there has been some frustration with the sanctions regime and there are concerns over safe harbours when the sanctions regime is imposed.

Commenting on the rising oil prices, Rajan said, India benefitted from low crude prices from 2014 onwards and now it‘s payback time. Growth has been poor for a while since demonetisation, he said, adding that he hopes the current scenario will create fresh introspection on what India can do to rebound.

Meanwhile, the White House is expected to impose a ban on US imports of oil from Russia as punishment for the invasion of Ukraine, Democratic US Senator Chris Coons said. In an interview with CNN, Coons said the announcement of the ban could come on Tuesday or Wednesday.

First Published:Mar 8, 2022 8:38 PM IST