BB asks banks to stop SWIFT payments with Russian entities

The central bank of Bangladesh has asked all the scheduled banks to be cautious about opening letter of credit (LC) and to stop transactions through the SWIFT system with the Russian banks, which have been sanctioned over the Ukraine invasion, reports news agency UNB.

On Saturday, the western countries suspended a number of Russian and Belarus banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.

In this context, the Bangladesh Bank asked all the banks in the country to become cautious about opening LCs with them as well, to avoid any risk of facing secondary sanctions.

Md. Serajul Islam, executive director and spokesperson of the central bank, told the news agency that the central bank has already asked commercial banks to stop all type transactions through SWIFT with sanctioned Russian Banks.

Russia requested Bangladesh Bank to stop all kinds of transactions with Russia related to the Roopur Nuclear Power Plant project, as well as other projects, till they have worked out and settled on an alternative arrangement.

He also said the two governments have reached a general understanding that no additional charge or fine would be incurred considering the situation, Serajul said.

The BB also asked banks to make payments to Russian banks that are not facing sanctions through Singapore and Hong Kong.

Of the $600 million imports from Russia, usually around three-fourths (3 quarters) or $450 million is paid via Singapore and the remaining $150 million is paid directly or through Hong Kong, BB spokesperson said.

“Though there is no direct disruption to trade with Bangladesh for the sanctions on Russia, concern is growing over maritime vessel transportation on different sea routes,” he added.