Sanctioned banks collect currency
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Large banks that have fallen under Western sanctions are increasingly willing to pay dearly for attracting deposits in unfriendly currencies. They explain this by caring about the needs of customers. However, experts are sure that the currency is needed to ensure the balance of liabilities and assets, taking into account those blocked in the currency under the sanctions. Despite the attractiveness of the offers and very high rates, citizens should be careful – the spread when converting currency into rubles can eat up all income, experts warn.
On Tuesday, March 28, Sovcombank announced that it was resuming fixed-term foreign currency deposits in US dollars. The minimum amount to open is $500, the yield on a deposit for a period of 12 months will be 3% per annum. This is one of the most profitable offers of deposits in unfriendly currencies. Higher rates are offered only by VTB, which is also under sanctions – 5.02% for 91 days with an amount of $1,000 or more. ICD – 0.6%.
As explained to “Kommersant” in Sovcombank, previously the bank’s customers could open foreign currency deposits in dollars. “Many such deposits expired a few weeks ago, and the currency remained on clients’ accounts at a 0% rate,” they noted. “Therefore, we decided to give them the opportunity to open a foreign currency deposit in dollars not at a zero rate.”
Other sanctioned banks, offering individuals to place an unfriendly currency in term deposits, also explain this by caring for citizens.
“VTB offers a wide range of instruments demanded by clients, including deposits in foreign currencies,” the bank noted. “The funds raised are also used as part of foreign exchange transactions.” Aleksey Okhorzin, head of the MCB retail business block, assured that the bank keeps foreign currency deposits (in dollars and euros) in the line of retail products for customers who want to diversify their savings.
However, the sanctions players have nowhere to use the currency, except for exchange transactions in large volumes. External payments for them are blocked by sanctions. And payments to customers are regulated by the Central Bank (see reference).
At the same time, there are no prohibitions for banks under sanctions to attract deposits in unfriendly currencies. Banks subject to sanctions can indeed attract foreign currency deposits to balance foreign currency assets that are still on their balance sheets, the Central Bank said. “At the same time, there is an active process of devaluation throughout the system, including deposits of the population: the share of foreign currency deposits has almost halved since the beginning of 2022, to 11% from 20%, and the volume of new attracted foreign currency deposits is insignificant,” they assured there. — At the same time, of course, the issue of customer awareness is extremely important. Now there are restrictions on the ability to receive cash from a foreign currency deposit/account, and conversion fees can be high, which neutralizes the effect that banks offer 3–5% per annum on such deposits.” When asked whether the Central Bank intends to take measures to deceive citizens, they did not answer there.
Valery Piven, Senior Director of ACRA, believes that banks can direct the borrowed currency to available financial instruments, the composition of which is extremely limited under the sanctions.
“Banks have frozen foreign exchange assets, and there should be some foreign exchange liabilities against them, speaking of the foreign exchange position, that is, the regulatory side of the issue,” says Yuri Belikov, managing director for validation at Expert RA. From the client’s point of view, this practice can cause questions and inconvenience, he adds. “Objectively, closing such a deposit and withdrawing funds is possible while the Central Bank’s restrictions are in effect, only in rubles, and the bank will somehow “eat” part of the interest received in its favor through conversion,” says Ilya Zharsky, managing partner of the Veta expert group. make recommendations to announce such deposits with a full explanation of all possible risks, but this will still remain at the discretion of market participants.” Most likely, no one will impose restrictions on attracting foreign currency from the population through foreign currency deposits, the expert concludes.
Ksenia Dementieva, Maxim Builov, Olga Sherunkova
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