30 banks from Russia indirectly connected to the Chinese settlement system CIPS
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About 30 Russian banks have joined the national Chinese bank transfer system CIPS (a local analogue of SWIFT). About it Vedomosti Roman Chernov, executive director of the Russian National Association of Participants in Financial Communications (Rosfincom), said.
So far, Russian banks are connected to the CIPS system as indirect participants, not direct ones. Direct participants, unlike indirect ones, can open an account with CIPS, send and receive messages through the system (indirect participants have access through direct ones), open accounts directly with CIPS (indirect ones through correspondent banks).
In accordance with the rules of the settlement system, the status of a direct participant is assigned only to residents of China and their subsidiaries. According to the publication, the only bank connected directly to CIPS is the Russian subsidiary of China’s largest ICBC bank.
Roman Chernov noted that the connection of other credit institutions will take longer, since CIPS cannot cope with the flow of applications. Some banks have been waiting for their application to be approved for several months, Alexei Maslov, co-chairman of the Payment Systems Committee of the Association of Russian Banks and Chairman of the SWIFT Users Group in Russia, confirmed.
Representatives of banks noted that connecting to CIPS is a rather complicated technical and legal process that requires not only the signing of relevant documents, but also the adjustment of the bank’s internal systems.
On May 23, within the framework of the Russian-Chinese business forum in Shanghai, VTB CEO Andrey Kostin declared about the need to directly connect Russian banks to the Chinese settlement system due to the growth of cross-border payments. According to him, in the last quarter, only payments made by VTB increased by more than 200%.
After the start of Russia’s military operation in Ukraine, the European Union disconnected more than ten major Russian banks from the international SWIFT system. From October 1, 2023, the regulator will prohibit the use of foreign services (including SWIFT) for the transfer of financial messages in the domestic market.
More about this – in the material “Kommersant” “SWIFT is disconnected from the inside”.
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