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Russian banks admitted to regulator’s alternative to SWIFT for internal banking operations

December 26, 2014, 12:11 UTC+3

Russia's Central Bank of Russia earlier reported it planned to complete creating a SWIFT alternative by May 2015

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Russia's Central Bank

Russia's Central Bank

© Vyacheslav Prokofyev/TASS

MOSCOW, December 26. /TASS/. The Central Bank of Russia has admitted domestic banks to its alternative to the SWIFT international bank transaction system for internal operations, the regulator said in a statement on Friday.

Russian banks are connected to the system after signing corresponding agreements with the Central Bank of Russia.

“The new service will allow credit institutions to transmit SWIFT-format messages through the Bank of Russia in all the [Russian] regions without restrictions,” the regulator said in a statement.

The regulator’s new service has been established to ensure the continuous and secure transmission of financial messages inside the country, the statement said.

The Central Bank of Russia earlier reported it planned to complete creating a SWIFT alternative by May 2015.

What is SWIFT and why create an alternative?

The European parliament came up with a proposal in mid-September this year to disconnect Russia from the SWIFT international financial message system to exert further pressure on Moscow over its stance on the Ukraine crisis. The initiative was supported by US senators.

SWIFT, which is headquartered in Brussels, said it will not respond to individual calls and pressure to disconnect financial institutions from its network and wants to remain a neutral provider of financial services.

Also in September, the Russian Central Bank and the government’s economic bloc drafted a law on creating a local alternative to the SWIFT non-governmental interbank communication system.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 1.8 billion transactions a year, remitting payment orders worth $6 trillion a day. The system comprises over 10,000 financial organizations from 210 countries.

Under the SWIFT charter, groups of members and users are set up in each country covered by the system. In Russia, these groups are united in the RosSWIFT association.

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