OCBC will stop handling any transactions involving Russia as it moves to cut exposure to the nation hit with global sanctions.
Singapore’s second-largest lender has told customers, including private bank clients, in recent weeks that the restrictions will kick in from Nov 1, according to a person with knowledge of the matter. OCBC cited operational challenges in managing regulatory compliance, the person said, asking not to be identified as the matter is not public.
In curtailing all Russia-related transactions, OCBC’s move shows how banks are getting more cautious as Russia’s war with Ukraine drags into its third year, triggering more sanctions and scrutiny. While Singapore’s government imposed unilateral targeted sanctions on Moscow in March 2022, targeting some Russian banks, crypto-trading activities and exports of certain goods, many other banking and wealth management activities for non-sanctioned parties have carried on.
OCBC declined to comment, in response to queries by Bloomberg News.
Beyond Singapore, the US and European Union are imposing further sanctions targeting Russian entities and industries. As recently as June, Washington widened the use of secondary sanctions as it sought to choke off the sale of semiconductor chips and other goods to Russia, targeting third-party sellers in China and elsewhere.
The transactions that OCBC and its wealth unit Bank of Singapore will stop processing include personal remittances involving counterparties in Russia, according to the person. They also cover the transport of goods as well as supply or sale of goods or services involving the nation.
The impact to OCBC from these curbs is not expected to be material as the bank stopped opening new accounts for clients linked to Russia in the last two years, the person said.
Banks around the world have sought to cut Russia-related risks that could lead to multi-million US dollar fines. In one case, Massachusetts-based State Street Bank and Trust Co agreed to pay US$7.5 million in July to settle allegations by the US Treasury that its unit breached sanctions. BLOOMBERG