Russia’s central bank warns Western banks not to discriminate against Russian clients

MOSCOW (Reuters) – Russia’s central bank has sent a stark warning to subsidiaries of Western banks remaining in Russia not to discriminate against their Russian clients by denying them services such as transferring money abroad, as the banks come under pressure from Western regulators.

Austria’s Raiffeisen and Italy’s UniCredit are the biggest foreign banks still present in Russia despite pressure from Western regulators to pull out. Both are on the central bank’s list of systematically important banks. Hungary’s OTP also has operations in Russia.

A Russian court froze Raiffeisen Bank International’s shares in a local arm earlier this month, blocking the biggest Western bank in Russia from leaving. The Austrian bank stopped money transfers abroad for Russian clients from Sept. 1.

“We are seeing pressure. We believe that the segregation being proposed is unacceptable. The subsidiaries of European and other foreign banks in Russia were established according to Russian laws,” central bank governor Elvira Nabiullina said.

“In this regard, we recently issued directives to the subsidiaries of European banks in Russia, prohibiting them from refusing to process foreign currency transfers or creating technical obstacles for such transfers based on approaches that do not comply with Russian law,” Nabiullina added.

Nabiullina said the central bank will review the list of systemically important banks this autumn but declined to say whether Raiffeisen and UniCredit will be removed from the list.