One of Russia’s state-run banking giants, Promsvyazbank has brought its security deposits payable to international payment systems, Visa and Mastercard, down to a minimum.
The measure is set to be implemented by converting domestic banking transactions to Russia’s Mir payment system, launched by the Central Bank of Russia in 2015, a year after Western sanctions against the country were introduced.
Promsvyazbank also reduced its foreign-exchange holdings.
Security deposits are commonly used as proof of intent for lenders to guarantee fulfilment of their settlement obligations. The amount of such a deposit depends on the bank’s daily turnaround.
According to Promsvyazbank president Pyotr Fradkov, the bank is currently setting up work with Russia’s national payment system Mir and its operator Russian National Card Payment System.
Earlier this year, Promsvyazbank, which was previously privately owned, was bailed out by the Central Bank and then chosen to service Russia’s defense sector needs.
The bank’s latest move comes as part of Russia’s efforts to protect its financial system from the risk of a further tightening of US bribery and corruption style sanctions.
RT. com / ABC Flash Point Banking News 2018.