Kremlin tells Russian banks to prepare for disconnection from international payment systems
This coming January, the U.S. Congress will resume reviewing sanctions bills, and the Russian Central Bank has begun to prepare for tough scenarios, with the possibility of one of the Russian banks to be disconnected from international payment systems.
According to the newspaper Vedomosti, the Central Bank sent letters to the Russian financial institutions recommending taking preventive measures in case the partner-banks, through which they work with the Visa and MasterCard systems, will be forced to suspend operations.
The Central Bank has learned from its bitter experience with the Master Bank, which provided credit card processing services to dozens of banks on the Russian market. After its license was revoked, small players could not resume work for several weeks, and some were forced to completely withdraw from the credit card business.
At present, the largest partner-banks participating in the card payment systems are RNKO Payment Center, Uralsib, Rosbank, VTB and Promsvyazbank. The latter two are included in the Countering America’s Adversaries Through Sanctions Act (CAATSA) as potential candidates for bank sanctions.
Moreover, Promsvyazbank, after its nationalization in December 2017, was turned into a support bank for the Russian defense sector and the Russian defense industry has been under sanctions since last summer.
According to the CAATSA, which was signed by Donald Trump in August 2017, banks that are involved in "substantial transactions" with Russian defense enterprises and structures, which are connected with army and intelligence, could be included in the SDN (Specially Designated Nationals And Blocked Persons List).
Russian bankers believe that the Central Bank tries to prepare for possible sanctions that would cause some Russian banks to be disconnected from Visa and Mastercard, as was the case in 2014-15.
In its letter, the Russian Central Bank recommends that commercial banks should find alternative partners for their credit card payment systems, conclude a new agreement and test the possibility of integration.
The Sberbank CEO, German Gref, at a meeting with wealthy clients in early December said that according to scenarios being discussed in Washington, one or two Russian banks could fall under the U.S. sanctions.
According to him, “none of the large banks” has come under sanctions yet, but in the future, the situation may change.
“What will happen by March-April, when they [ the Americans] promise to review this issue, only God knows,” said Gref.