Economy

Russian banks face problems due to sanctions: Turkey and China refuse to work with them

Turkish banks are refusing to work with Russian banks for fear of sanctions, reports citing Russian media. This includes both the severance of correspondent relations and the suspension of payment processing without formal closure of contracts.

Russian bankers claim that the difficulties arose a long time ago, but at the end of December the situation deteriorated sharply, affecting almost all Turkish banks. This is due to the US President’s decree on secondary sanctions, which was published on 22 December last year. As a result, Turkish banks have severed correspondent relationships with almost all Russian credit institutions to avoid US sanctions.

Among the major participants in the settlements, bankers name Turkey’s Nurol Bank, with which about 40 Russian credit institutions worked, and Emlak Bank. Russian banks’ accounts in Turkey were opened in lira, dollars and other currencies – some banks accepted payments in rubles.

Now, according to some Russian market participants, Turkish banks have paused and are not making money transfers from and to Russia in any currency. Others claim that Turkish banks, which have tightened controls following the introduction of the 12th EU sanctions package, have started to demand more data and documents when making payments in lira to confirm that all participants in the chain are sanctioned. All banks require information about the final recipients and a declaration for the goods, etc.

Similar problems have even started to arise in relations with Chinese banks, as they also do not want to be subject to US sanctions. The Russians claim that there are only isolated problems with the Chinese so far, but the situation has already changed for the worse for Russia. Currently, the Russians are thinking about how to ensure the chain of payments with Turkish and Chinese banks through the financial institutions of Central Asian countries that are still ready to cooperate with them.

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