BB asks banks to stop SWIFT payments with Russian entities, urges caution on LCs

The Bangladesh Bank asked all the scheduled banks to be cautious about opening letters of credit (LC) and to stop transactions through the SWIFT system with the Russian banks that have been sanctioned over the Ukraine invasion.

On Saturday, the western countries suspended a number of Russian and Belarussian banks from the Society for Worldwide Interbank Financial Telecommunication or SWIFT system.

In this context, the BB asked all banks to become cautious about opening letters of credit (LC) with them as well, to avoid any risk of facing secondary sanctions.

Md Serajul Islam, executive director and spokesperson of BB, said last night that the central bank has already asked commercial banks to stop all type transactions through SWIFT with sanctioned Russian banks.

Russia requested BB to stop all kinds of transactions with Russia related to the Roopur Nuclear Power Plant Project, as well as other projects, till they have worked out and settled on an alternative arrangement.

He also said the two governments have reached a general understanding that no additional charge or fine would be incurred considering the situation, Serajul said.

The BB also asked banks to make payments to Russian banks that are not facing sanctions through Singapore and Hong Kong.

Of the $600 million imports from Russia, usually around three-fourths (three quarters) or $450 million is paid via Singapore and the remaining $150 million is paid directly or through Hong Kong, the BB spokesperson added.

"Though there is no direct disruption to trade with Bangladesh for the sanctions on Russia, concern is growing over maritime vessel transportation on different sea routes," he said.