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VTB negotiates with Sberbank alternative to SWIFT

Russia is not facing any problems with national settlements at the moment, VTB head Andrey Kostin says
VTB head Andrey Kostin (L) and Sberbank CEO German Gref (R) ITAR-TASS/Maxim Shemetov/Archive
VTB head Andrey Kostin (L) and Sberbank CEO German Gref (R)
© ITAR-TASS/Maxim Shemetov/Archive

WASHINGTON, October 13. /TASS/. Russia’s Vneshtorgbank Group (VTB) is negotiating with Sberbank an alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), VTB head Andrey Kostin told reporters on Monday.

“Of course, we are working with the Central Bank as well. There is an alternative — we may be using the existing Central Bank’s system, or we could create a new one — we have been negotiating with Sberbank on that,” he said.

Using the system of the Central Bank is expensive, he said. “(It is) several times more expensive than SWIFT operations,” he said. “If we make our own system, which is not complicated at all, and we are moving in that direction, it will be cheaper. And afterwards we could negotiate with the Central Bank.”

Russia is not facing problems with national settlements. “I believe, we could agree with SWIFT regarding a certain national center on such issues, I do not see problems here,” he said. A possible cut off of Russia from the SWIFT system will cause problems in international operations. This problem does not have a solution yet, he said.

“Surely, there are other ways of settlements, but they are outdated, effort-consuming; thus, there is no simple alternative, but we have been considering several options, which do exist.”

In early October, SWIFT said in a statement it had no intention to unilaterally disconnect Russia.

The SWIFT Company described the EU resolution as a discriminatory document and an example of unequal regulation. SWIFT added that EU’s possible actions might cause great damage to the company’s reputation.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 1.8 billion communications per 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. According to RosSWIFT, Russia is second after the U.S. in users of the system.