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Russia’s deputy finance minister said the country would not allow foreign banks to exit the market easily, Reuters reported.
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Russia’s decision to let the banks leave would “depend on the decision to release Russian assets,” he said.
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Russia has imposed punitive measures on companies leaving the Russian market.
Russia is imposing ever-increasing costs for business breakups by foreign banks – it now requires them to release Russian assets if they want to exit the market.
“We have made our position known and it remains that way: we will be tough on letting foreign banks go, it will depend on the decision to release Russian assets,” said Alexei Moiseev, Russia’s deputy finance minister, Friday at a forum, Reuters reported. .
Western countries and their allies have frozen more than $300 billion in assets of Russian central banks abroad as part of their sanctions against Russia over its massive invasion of Ukraine in February 2022. It is not clear how much of this Russian assets will be used by Western banks are frozen. .
Moiseev’s comments come as President Vladimir Putin’s regime continues to impose increasingly punitive measures on companies attempting to exit the Russian market.
Despite 1,000 companies announcing that they are voluntarily scaling back operations just two months after the war in Ukraine began in February 2022, only 535 foreign companies have made a clear break with the country, according to an ongoing study from Yale University that for last updated on September 3rd. found it.
But that’s not due to a lack of efforts: more than 2,000 companies sought approval to leave the Russian market, but progress was slow, partly due to logistical delays.
Moscow also charges departing companies an exit fee of at least 10% of the sales value of the local company. In addition, from March 2023, the Russian government began requiring sellers from “unfriendly countries” to donate a minimum of 10% of sales proceeds to the Russian budget.
Raiffeisen Bank – the largest Western bank still operating in Russia and in the process of selling or separating its local operations – said in its semi-annual report published Aug. 1: “The local and international laws and regulations governing the Company sales regulations in Russia are constantly changing.”
Moiseev said on Friday’s forum that there was a foreign bank that had applied to sell its assets in Russia, Reuters reported. He did not name the bank, but added that Raiffeisen had not made such an application.
Chinas The Big Four banks lend billions of dollars to Russia
While Western banks have reduced or are working to reduce their exposure to the Russian market, Chinese banks are trying to fill their shoes.
The Kiev School of Economics found that China’s four major banks — the Bank of China, Industrial & Commercial Bank of China, China Construction Bank and Agricultural Bank of China — more than quadrupled their lending to Russia between February 2022 and March 2023. The Times reports Monday.
At the beginning of February 2022, the four major Chinese banks had a combined exposure of $2.2 billion to the Russian banking sector. By the end of March 2023, that had risen to nearly $10 billion, the FT reported.
The Russian Ministry of Finance, the Kiev School of Economics, the Bank of China, the Industrial & Commercial Bank of China, the China Construction Bank and the Agricultural Bank of China did not immediately respond to Insider requests for comment. The Chinese banks declined to comment to the FT.
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