EU bans seven Russian banks from SWIFT

The European Union has excluded seven Russian banks from the SWIFT messaging system in the latest sanctions imposed on Russia over its war in Ukraine. However, the EU has left in the banks handling energy payments.

The excluded banks include Russia’s second-largest bank VTB, Bank Otkritie, Novikombank, Promsvyazbank (PSKBI.MM), Bank Rossiya, Sovcombank and VEB. Each of them will be given a 10-day period to wind-down their SWIFT operations.

The US and UK had been pushing for the SWIFT ban to be implemented but some European countries were resisting due to their reliance on Russian energy exports.

European Union

The removal of these Russian banks from SWIFT was seen as drastic and unlikely a week ago, in the beginning of the invasion. It is one of the most powerful tools Western countries have to make Russia change course.

Russia’s largest lender Sberbank and Gazprombank were not included as they are the main channels for payments for Russian oil and gas.

However, Sberbank was affected by the sanctions. As its European subsidiaries are facing huge cash outflows, the lender is leaving the European market.

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