Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict
Bank in Kyrgyzstan have refused to service Russia’s Mir cards due to fear of sanctions from the US authorities, reported Interfax citing Kyrgyz National Bank deputy chairman Kaiyp Kulenbekov.
“Kyrgyz banks, which have stopped service for Mir cards, have done so for fear of sanctions by US fiscal agencies,” Kulenbekov told at a meeting of the country’s parliament.
According to the central bank official, servicing Mir cards could harm local banks as the sanctions would impair lenders’ ability to service their correspondent accounts abroad.
The banking regulator did not pressurise local banks to withdraw service for Russian card system, Kulenbekov noted.
In retaliation for Moscow’s military assault on Ukraine, the US-led western alliance implemented sanctions that, among other things, targeted Russia’s financial services industry.
By the beginning of November 2022, half of the banks in Kyrgyzstan stopped servicing the Mir system.
Out of the 23 commercial banks operating in Kyrgyzstan, Tolubay, Eurasian Savings Bank, Kyrgyzkommertsbank, Capital Bank, Kemeret, RSK, and EcoIslamicBank are still servicing Mir cards, the report said.
In September, the US Treasury said that non-US financial institutions “risk supporting Russia’s efforts to evade US sanctions through the expanded use of the MIR National Payment System outside the territory of the Russian Federation.”
The US authority also said that it is ready to impose sanctions on entities helping Russia circumvent sanctions.