The State Duma approved a bill in a second reading that would permit foreign banks to establish branches inside Russia. This development was reported on the central bank’s website.
Under the bill, foreign bank branches would be authorized to offer a broad spectrum of services to corporate clients. These services would include opening and maintaining bank accounts, transferring funds, handling cash operations, issuing guarantees and sureties, and managing rental agreements for private premises and safes. Additionally, branches could provide advisory and information services, as well as engage in related administrative activities.
The document specifies that the Central Bank of Russia will supervise the operations of foreign bank branches. The law is anticipated to take effect on September 1, 2024, in alignment with the legislative timeline.
At present, foreign banks in Russia operate only through subsidiaries and representative offices, not as standalone branches.
Johann Strobl, former chairman of Raiffeisen Bank, remarked in a Bloomberg interview that the group accelerated the withdrawal of its Russian operations due to European Central Bank requirements.
There is historical context as Raiffeisenbank had previously reduced transfers in U.S. dollars as part of its strategy in the region.