Russian banks consider leaving Ukraine after new sanctions

Ukrainian President Petro Poroshenko has approved sanctions against five banks with the Russian capital, the press service of the Ukrainian president said.

Photo: AP photo

It goes about Sberbank, VS Bank, Joint Stock Commercial Industrial and Investment Bank, OJSC Vneshtorgbank, and OJSC BM Bank. Restrictive measures against the organizations will be in effect for a year.

"The Cabinet of Ministers together with the National Bank of Ukraine should ensure the implementation and monitoring of the effectiveness of the sanctions. (...) The head of the National Security Council of Ukraine, Alexander Turchynov shall control the implementation of the decision," the message from the press service of the Ukrainian president said.

Poroshenko instructed the Cabinet of Ministers and the National Bank to take urgent measures to prohibit the placement of funds of state enterprises, institutions, organizations and economic structures in the sanctioned banks.

"Ukraine's Foreign Affairs Ministry shall inform competent authorities of the European Union, the United States and other countries about the imposition of sanctions and raise the issue of applying similar restrictive measures against relevant legal entities," the statement also said.

In pictures: Ukrainian radicals vs. Russian banks

Earlier, the National Bank of Ukraine proposed imposing sanctions against Ukrainian "subsidiaries" of Russian banks. The "black list" included Sberbank, VTB, BM-Bank, Prominvestbank and VS Bank. It was proposed these banks should not be allowed to wire their funds outside Ukraine.

On March 16, Kremlin spokesman Dmitry Peskov said that the Russian Federation would protect banks with Russian capital in Ukraine. According to the Ministry of Finance, the banks with Russian capital were  the only healthy part of the Ukrainian financial system.

Russian Foreign Minister Sergei  Lavrov stated that the Ukrainian authorities would "shoot themselves in the leg" if they wanted to create problems for those financial structures.

Experts believe that the economy of Ukraine will collapse should Russian banks leave the country. It is Russian banks that have been bringing billions of dollars into the already defaulted economy of Ukraine. If Russian banks leave the Ukrainian market, common people will be happy not to pay their loans back, but the economy of Ukraine may thus collapse.

A Pravda.Ru source close to the Russian Central Bank said that such an option was being analyzed to calculate possible losses and consequences for the economy of Russia and its partner countries.

Pravda.Ru

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