Sberbank, which is by far Russia’s largest lender, will be joined by major banks the Credit Bank of Moscow and the Russian Agricultural Bank following agreement from the EU. President of the European Commission Ursula von der Leyen said the measures would “hit banks that are systemically critical to the Russian financial system and Putin’s ability to wage destruction.” A number of Russian banks, including its second-largest bank VTB, have already been pushed off SWIFT, however so far the EU has resisted removing banks such as Sberbank which handle energy payments. This is set to become a less important factor with today’s new sanctions including the news the EU will also begin phasing out Russian crude oil imports over the next six months.
With Sberbank accounting for around 37 percent of Russia’s banking sector disconnection from SWIFT deals a major blow to an already fragile economy increasingly cut off from mainstream finance.
While not a transfer system in itself SWIFT provides messaging services to support and authorise payments making it essential for financial institutions to function.
Typically it processes over 40 million messages per day.
Ms von der Leyen said disconnecting “systemically critical” Sberbank would “solidify the complete isolation of the Russian financial sector from the global system”.