Russian Bank once popular for money transfers is going to restrict its operation in Kazakhstan

Raiffeisenbank, which is a subsidiary of Raiffeisen Bank International (RBI) in Russia, is going to suspend money transfers in euro to accounts in Kazakhstan and some other countries this July, according to the bank’s website. The restriction will be applied to all accounts owned by individuals, entrepreneurs and businesses.

Due to restrictions imposed by correspondence banks outgoing payments to recipients in Kazakhstan, Russia, Azerbaijan, Armenia, Belarus, Georgia, Jordan, Kyrgyzstan, Moldova, the UAE, Tajikistan, Turkmenistan and Uzbekistan won’t be available starting from July 3, 2023, the bank reported.

These restrictions will also be applied to outgoing money transfers in euro to clients’ accounts opened in other banks in those countries. The bank has recommended its clients change the currency for their outgoing payments or use other methods of payment.

However, these new rules won’t be applied to money transfers in euro between clients of Raiffeisenbank in Russia. They will be able to conduct money transfers in euro between their own accounts or to any client of Raiffeisenbank.

In April 2023, Raiffeisenbank strengthened its policy toward foreign currency transfers by individuals, citing the necessity to comply with the correspondence banks’ limits for the number of such transfers. The bank has increased the minimum amount of money for transfers both in USD and euro to 20,000. In addition, Raiffeisenbank introduced a fixed fee of $300 or €300 for any money transfer. The new rule made it impossible to make outgoing transfers for regular clients except for wealthy ones.

In June, the bank introduced a 50% fee for incoming payments in US dollars (not greater than $500) and recommended its clients look for other ways of receiving money.

RBI Group has been working in Russia through its Raiffeisenbank, one of the top ten commercial banks in Russia in terms of assets as of 2021, as well as leasing, insurance and managing companies. In 2022, RBI reported that its revenue increased by 2.5 times and reached €3.8 billion. Russian subsidiaries of the group accounted for €2.1 billion (54%) of this revenue.

Raiffeisenbank is one of a few banks in Russia that still conducts SWIFT transfers. In February 2023, the Financial Times wrote that the bank’s subsidiary in Russia accounted for about half of all transactions between Russia and the rest of the world, citing a top executive in Raiffeisen.

In turn, RBI said that the company is thinking about various scenarios for Raiffeisenbank in Russia including carefully thought out withdrawal from the Russian market.