Russian businesses report surging number of rejected transactions in Central Asian banks
According to Russian RBC, commercial banks in Central Asia are increasingly rejecting Russian companies in banking transactions.
In July 2024, the share of rejected payments through banks in Kazakhstan, Uzbekistan and Tajikistan reached 30%, says a survey prepared by Russian transportation companies – PEС, Digital VED, GTL and Logita Trade – and reviewed by RBC.
Furthermore, the average deadline for a transaction also grew by 15% compared to June, reaching two weeks. Big business associations in Russia have also confirmed this information to RBC.
Even though banks have not reveal the reason they won’t allow Russian companies to execute their transactions, Roman Romashevskiy, financial director of PEK, believes this is related to an overall course on strengthening compliance. Central Asian banks started to ask Russian companies for additional documents about their founders, clients and origin of assets.
As RBC pointed out, Russian businesses reported the first problems with banking transactions back in 2022. In the second quarter of 2024, these hurdles intensified and now happen during settlement in local currencies.
Central Banks strengthened their approach to Russian companies in December 2023, when U.S. President Joe Biden signed an edict threatening foreign banks with sanctions for assisting Russian individuals on the sanctions list and facilitating supply to the Russian defense sector.
In June 2024, the U.S. included Russian banks in the notion describing the Russian defense and industrial base, raising the risk of secondary sanctions for Central Asian states. The majority of these difficulties related to banking transactions were reported by Russian businesses in Kyrgyzstan.
Kursiv has requested six Kazakhstani banks to comment on this information. According to the press service of Forte Bank, its specialists haven’t reported any surge in rejected transactions, while the bank has always been following its «conservative policy.»
On July 3, 2024, the Office for Foreign Asset Control (OFAC) under the U.S. Department of the Treasury published a list of entities and individuals banned from cooperation with any organization in the U.S. and third-party countries under the risk of secondary sanctions. This list includes VTB Kazakhstan, the only subsidiary of the sanctioned Russian bank. According to the ARDFM, it isn’t going to take any measures in this regard.
