MOSCOW, August 21 (RIA Novosti) - The Central Bank of Russia has urged the country’s banking community to establish alternative channels of interbank communications to replace the SWIFT (Society for Worldwide Interbank Financial Telecommunications) system, Kommersant reported Thursday, citing a CBR letter.
The letter, obtained by Kommersant, was sent to Russian banking institutions in early August, a few days after the United States and the European Union introduced new sanctions against some Russian banks. In the document, the central bank argues that the creation of integrated national financial messaging infrastructure is an issue of national economic security.
The vast majority of bank-to-bank transactions are conducted via SWIFT, which allows foreign banks to request information concerning clients and block operations if the obtained data does not satisfy them. The transition to a communications channel unrestricted by Western regulations would take at least a year, a banking expert told Kommersant.
Russian authorities started searching for ways to decrease Russian financial markets’ dependence on SWIFT in spring, when a number of Russian banks were hit by Western sanctions. Russia’s Ministry of Finance is considering requiring SWIFT to provide uninterrupted services for Russian banks and introducing financial penalties for the unilateral disconnection of members. However, Kommersant says the CBR’s letter suggests the national regulator still has not given up on the idea of establishing a Russian SWIFT-like system.
SWIFT binds together 10,000 financial organizations in 210 countries, providing the infrastructure for $6 billion in interbank operations every day.