Central Asian Banks Snub Russian Company Payments
Central Asian banks are facing challenges related to accepting payments from Russian companies, leading to increased processing times and refusals of transactions.
In recent months, banks in Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan have seen a significant rise in the number of payments being rejected, with a 30% increase in July alone. The processing time for transactions has also gone up by 15%, now taking up to two weeks to complete.
The strict compliance measures implemented by banks in these countries are cited as the primary reason behind the payment refusals. They are now requiring more detailed information and documents from Russian companies, such as details about the company, its founders, clients, sources of funds, and transaction specifics. This has made it challenging for businesses to conduct transactions smoothly, with even settlements in local currencies being affected.
According to Roman Romashevsky, the financial director of PEC transport company, the problem has escalated in the second quarter of 2024. He highlighted that even payments for small batches of goods worth $10,000 are facing rejection, making it difficult for businesses to carry out their operations seamlessly.
Tatyana Alexeeva, Director General of Logita Trade, emphasized that larger transactions worth $50,000 are being particularly impacted by these payment refusals. She highlighted the complexities that arise when payments are made through Central Asian banks to other countries, including China.
Anna Fomicheva, the co-founder of Digital VED, noted that banks are justifying these refusals as a way to avoid potential blacklisting due to U.S. sanctions. The situation has posed challenges for businesses operating in Central Asia, impacting their ability to make international payments and conduct business transactions effectively.
