* Bank Rossiya to cease foreign currency operations
* To work only with Russian rouble
* Move a step towards broader use of rouble as settlement
currency - VTB
MOSCOW, March 28 St Petersburg-based Bank
Rossiya is to cease all foreign currency operations and work
only with the Russian rouble in response to U.S. sanctions
imposed last week, it said in a statement on Friday.
Bank Rossiya is Russia's 15th-largest bank by assets, and
the only Russian company that has so far been included on the
list of individuals and entities sanctioned over Russia's
annexation of Crimea, because of its close links to businessmen
seen as personal allies of Russian President Vladimir Putin.
U.S. officials said that the bank would be "frozen out of
On Monday the bank advised its clients to cease payments in
"With the goal of defending the clients of the bank from the
unscrupulous actions of foreign financial institutions
Joint-Stock Bank Rossiya has taken a decision about working
exclusively on the internal Russian market and only with one
currency - the national currency of the Russian Federation - the
rouble," Bank Rossiya said in a statement.
The U.S. government said that Bank Rossiya was targeted
because it had provided "material support" to Russian government
officials and because its largest shareholder, St Petersburg
businessman Yuri Kovalchuk, is "a personal banker for senior
officials of the Russian Federation including Putin".
The head of state-controlled Russian bank VTB said Bank
Rossiya's decision was a step towards broader use of the rouble
as a settlement currency.
"Russia should sell Russian products - from armaments to oil
and gas - in roubles, and should also buy goods in roubles," VTB
CEO Andrei Kostin said in a transcript of an interview he gave
to Rossiya 24 distributed by VTB. "Then we will get the full
benefits that the rouble gives us as a convertible currency."
Kostin said Russia has been moving for some time towards
making broader use of the rouble as a settlement currency - the
currency in which goods and securities are paid for.
While the rouble is effectively fully convertible - meaning
holders can switch freely into other currencies or gold - the
effects have been "more negative", he said.
This has led to capital outflows and inflows of foreign
investments of a "highly speculative nature that to a
significant degree destabilise our stock markets," he said.
"For Russians... the stability of our currency is very
important, and the possibility of having savings in the national
currency without having to worry constantly about how the dollar
and euro are fluctuating," Kostin said.
In its statement on Friday, Bank Rossiya said that it had
informed several American banks that it was closing its
correspondent accounts, and that it would send similar
notifications to other foreign financial organisations in the
The bank said that the changes did not affect its ability to
fulfill its obligations before its clients and partners, all of
which it said are being fulfilled on time and in full.
(Reporting by Jason Bush and Megan Davies; Editing by Elaine