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28 Sep, 2022 08:56

Turkish state banks exit Russian payment system – Bloomberg

The threat of US sanctions has forced lenders in Türkiye to stop dealing with Russian Mir cards, a senior official told Bloomberg
Turkish state banks exit Russian payment system – Bloomberg

Three Turkish state-run banks, the only ones in the country processing transactions with Russia’s Mir cards, are planning to pull out, Bloomberg reported on Tuesday, citing an unnamed senior official.

The decision followed a warning from the White House that financial institutions would risk secondary penalties if they help sanction-hit Russia to bypass Ukraine-related punitive measures.

Earlier this month, the US Treasury’s Office of Foreign Assets Control (OFAC) announced that it was ready to impose sanctions on any institution outside Russia using the country’s payment system. 

Turkish lenders joined the Mir payment network in early August, allowing tourists from Russia to pay for their purchases in the country. 

The forced measures that are expected to be taken by Halkbank, Ziraat Bank and VakıfBank to stop using Mir marks the latest turnaround in the Turkish stance on anti-Russia sanctions.

Last week, President Recep Tayyip Erdogan, who has performed a delicate balancing act since Moscow launched the military operation in Ukraine, announced plans to hold an economic meeting with the country’s top officials to evaluate possible decisions on Mir cards in the light of Western sanctions for servicing its cards.

Mir was developed by the Central Bank of Russia as a domestic alternative to Visa and Mastercard after the first round of sanctions was imposed on Moscow in 2014. Since the introduction of the new payment system, Russian banks have issued more than 129 million Mir cards. 

Last week, Russian media reported that banks in Kazakhstan and Vietnam had stopped accepting Mir payment cards to avoid the risk of US secondary sanctions.

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