SBI To Boost India–Israel Trade Using Indian Rupee Amid FTA Talks | Business News

SBI set up its Israel branch in 2007 and has continued full-scale operations despite challenges such as the pandemic and more than two years of regional instability linked to the ongoing conflict.

India’s largest public lender State Bank of India (SBI) is exploring options to boost bilateral trade between India and Israel in Indian rupees, according to PTI. It comes on the heels of gaining momentum for the India-Israel Free Trade Agreement (FTA) and discussions between both governments.

SBI is the only Indian lender having presence in Israel.

CEO of SBI Israel, V Manivannan, told PTI that the banking regulator Reserve Bank of India has allowed Indian banks to facilitate settlement of exports and imports of their respective corporate clientele in INR. Israel has been identified as one of the partner countries under this mechanism, he added.

Manivannan explained that Israeli entities undertaking exports/imports through this mechanism will receive and make payments in INR, which shall be credited into the Special Rupee Vostro Account (SRVA), against invoices for the supply/purchase of goods or services from the Israeli seller/buyer.

“SBI Tel Aviv has all the requisite approvals in place to facilitate these transactions”, he added.

The State Bank of India has stepped up efforts to deepen India–Israel business ties, with its Tel Aviv branch actively promoting trade settlement in rupees and smoother remittance flows for Indian workers in Israel, PTI reported.

In recent months, the branch has held multiple meetings and webinars with the Israel-India Chamber of Commerce to encourage the use of the Indian currency in cross-border trade. Senior representatives from several leading Israeli defence companies have also participated in these discussions, according to PTI report.

With over 40,000 Indian workers recently joining Israel’s labour market, SBI is now focusing on easing remittances back home. The bank is helping these workers open NRI accounts in India through its Tel Aviv branch, making it simpler to send money home.

“There has been a sharp rise in Indian workers, especially in construction and agriculture,” said Manivannan, CEO of SBI’s Tel Aviv branch. He added that the branch is connecting the Indian diaspora with NRI banking services in India and is also exploring partnerships with fintech firms and local banks to support rupee-denominated remittance services.

SBI set up its Israel branch in 2007 and has continued full-scale operations despite challenges such as the pandemic and more than two years of regional instability linked to the ongoing conflict. Globally, the bank operates across 29 countries with 241 points of presence outside India.

Located in the Diamond Exchange area of Ramat-Gan, near Tel Aviv, the branch serves local corporates with trade finance, bank guarantees for India-linked projects, and business banking services.

Israeli Minister of Tourism Haim Katz, Minister of Economy and Industry Nir Barkat, Minister of Agriculture and Food Security Avi Dichter, and Finance Minister Bezalel Smotrich visited India during 2025 as the strategic partners build-up momentum to sign a Free Trade Agreement.

The two countries signed a Bilateral Investment Treaty (BIT) during Smotrich’s visit to India, and a term of reference for an FTA was signed during Goyal’s visit to Israel.