Transaction hurdles: Russian businesses report payment challenges in Kazakhstani banks

Kazakhstan’s banks have dramatically increased the timescale for executing transactions with Russian companies, according to the Russian RBC news agency, citing representatives of transportation companies and lawyers. They claimed that the remittance of funds may take as long as two months. 

According to the sources, average transaction and payment processing times have increased by 24% compared to July. They suggest this may be due to stricter compliance checks, including enhanced risk assessments and sanctions screening, but they don’t elaborate on why this change occurred now. Kursiv.media has requested market participants to comment on the situation.

On top of that, Russian entrepreneurs noted that, recently, Kazakhstani banks have been requesting more documents and supplementary explanations from them regarding payer companies, payment recipients, their activities, purchased goods and transaction details. Andrei Gusev, a managing partner at the Nordic Star law firm, says that the terms of transaction processing directly depend on its complexity and amount.

At the same time, Alibek Slan, a lawyer at the Kazakhstani Revera law firm, claims that the average term of a payment transaction doesn’t exceed two or three weeks. Other sources state that the situation became more challenging around three weeks ago. Several companies even decided to give up on payments via Kazakhstani banks without disclosing the alternatives they use.

Reports on payment hiccups or suspensions between Russia and Kazakhstan have occasionally appeared over the last few months. In late May, The Moscow Times media outlet reported that money transfers from Russian banks to China via commercial banks in Kazakhstan had completely ceased as the Bank of China allegedly refused to accept such payments.

In late July, RBC also reported on transaction hiccups. According to sources familiar with the matter, whom the news agency spoke to, Kazakhstani banks at the time refused to process nearly 30% of payments, with successful transactions sometimes taking up to two weeks to complete. This allegedly occurred in banks not only in Kazakhstan but also in Uzbekistan, Kyrgyzstan and Tajikistan. 

At the time, Kazakhstani banks denied claims of bias toward payments from Russian entities. Representatives of most financial institutions said that non-sanctioned clients received the same standard service as any other customer.