EDB offers CBR service to promote Russian alternative to SWIFT in EAEU
MOSCOW. Jan 29 (Interfax) - The Eurasian Development Bank (EDB) has offered the Central Bank of Russia (CBR) its services to promote Russia's financial messaging system (FMS) in Eurasian Economic Union (EAEU) countries.
"We're working with the FMS and are trying to promote the Bank of Russia's solution on our client base. This could also be needed by the Bank of Russia. We could easily become an agent for the promotion of the FMS," EDB deputy CEO Olga Komarova said at a roundtable in the Federation Council.
She said the bank actively uses the FMS in settlements as the main or backup system. "We're holding negotiations with local banks in Armenia, Kazakhstan and Belarus on using the FMS in our specific settlements," Komarova said.
The Russian authorities wanted to protect the country's banks from possible problems in the event of the country being shut out of the SWIFT international financial messaging system, so in December 2014 the CBR unveiled a new service to exchange financial messages in SWIFT formats for domestic transactions. Banks are connected to the FMS by entering into contracts with the CBR. Subsequently, foreign market participants were also allowed to connect to the system.
The CBR has already begun using the FMS in the EAEU, the Russian bank's head of international cooperation, Andrei Lipin said. Banks from a number of other countries outside the EAEU have also joined the system, making it possible to minimize the risk of Russia being cut off from SWIFT, he said. "We have tools to minimize this risk," Lipin said at the roundtable.
The EDB is also aggressively promoting the use of its settlements and clearing system for transactions in national currencies. It has proposed to stop using the U.S. dollar in transfers of import customs duties and switch to settlements in national currencies using a settlement bank for these transactions.
Belarus, Armenia and Russia have supported the proposal to conduct settlements on import duties through the correspondent accounts of central banks and directly convert funds into national currencies, Komarova said. But discussions on this issue are still continuing.
Meanwhile,the EDB has begun to develop settlements in national currencies with local banks in member countries, offering them the option to transfer client funds from one country to another with simultaneous conversion into national currencies. Sixty-four banks have already joined the system and the EDB expects to increase the number to 70 soon, Komarova said.
The EDB is an international financial organization whose shareholders are six countries: founders Russia and Kazakhstan, as well as Armenia, Belarus, Kyrgyzstan and Tajikistan. The bank is headquartered in Almaty.
