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Report: Russian banks working on contingency plan in case of new US sanctions

Big Russian banks are in the process of drafting a contingency plan to maintain access to the global financial system in case the U.S. imposes new sanctions on them, Reuters reported March 14, citing sources familiar with the matter.

The banks, including PAO Sberbank of Russia, VTB Bank PJSC and AO Gazprombank, are weighing ways to provide each other access to U.S. dollars or other major foreign currencies by leveraging correspondent accounts, the sources said.

The plan, which would only be a temporary solution, is for at least one major Russian bank to avoid sanctions and the remaining Russian banks use correspondent accounts to move currencies, Reuters reported.

Fears of possible sanctions have loomed over Russian banks for the last year. The move, which is a temporary solution to tackle panic in case sanctions are imposed, was drafted by banks and the Russian finance ministry and central bank in 2018, Reuters noted.

Sanctions imposed by the U.S. in 2018 terminated some foreign aid, arms sales and financing to Russia; denied Moscow government credit or other financial assistance; and banned exports of national security-sensitive goods and technology.