- Russian lawmakers approve bill for foreign banks to open branches.
- The move aims to ease international transactions affected by sanctions.
- The bill requires further legislative steps and presidential approval.
In a significant legislative shift, Russia’s State Duma has given preliminary approval to a bill that would permit foreign banks to establish branches within the country.
The proposed legislation stipulates that foreign banks must deposit 1 billion roubles and limits the number of foreign staff to 50% in their branches.
Russia Proposes New Legislation to Facilitate Foreign Bank Branches
Russia is advancing a bill that would enable foreign banks to open branches in the country, a move aimed at improving international financial operations. The bill, which has received preliminary approval from the State Duma, addresses the complications that Russian banks have faced due to Western sanctions. These sanctions have restricted their ability to use the SWIFT global payments system, complicating international transactions.
The new legislation outlines specific requirements for foreign banks, including a substantial security deposit of 1 billion roubles and a cap on foreign staff at 50%. The branches will be restricted from handling individual accounts but will be authorized to facilitate cross-border settlements. This approach is designed to mitigate the disruption in international transactions caused by the sanctions.
The bill’s passage through the legislative process is not yet complete. It must undergo two additional readings in the State Duma, secure approval from the Federation Council, and receive the president’s signature before becoming law. This multi-step process reflects the importance of the proposed changes and their potential impact on Russia’s financial landscape.
If enacted, the legislation could significantly alter Russia’s financial environment by providing a new avenue for foreign banks to operate within the country. The move is seen as a strategic effort to enhance Russia’s financial integration with the global economy and to offer alternative mechanisms for cross-border transactions.
The proposed legislation represents a strategic shift in Russia’s financial policy, aiming to improve international financial transactions amid ongoing sanctions. If successful, it could provide a crucial boost to Russia’s economic connectivity with the global market.
“Settlements are the economy’s connecting thread,” Deputy Finance Minister Alexei Sazanov said, highlighting the bill’s goal to streamline international transactions.
