Business Tech World

Brics bank to stop doing business with Russia

The New Development Bank (NDB), founded in 2015 by Brics countries (Brazil, Russia, India, China and South Africa), has stopped doing business with Russia because of its military intervention in Ukraine.

The NDB’s move follows crippling economic sanctions that Russia has already imposed by western world powers since the invasion of Ukraine began on February 24.

Russia transactions on hold

in brief statement issued by the NDB on March 3, the financial institution said in light of the “unfolding uncertainties and limitations” caused by sanctions imposed on Moscow, the NDB decided to suspend new transactions in Russia.

“The NDB applies sound banking principles in all its activities, as stated in the articles of association.

“NDB, as an international institution, will continue to conduct business in full compliance with the highest standards of compliance,” the bank said.

The NDB was founded by Brics countries to mobilize resources for infrastructure and sustainable development projects in Brazil, Russia, India, China and South Africa and other emerging economies and developing countries.

The bank, which has a registered capital of USD 100 billion, was also established to complement the existing efforts of multilateral and regional financial institutions such as the World Bank for global growth and development.

Visa, Mastercard suspend operations in Russia

Meanwhile, card payment giants Visa and Mastercard announced over the weekend that they would suspend operations in Russia after March 9, the last major US companies to join Moscow’s business freeze over the invasion of Ukraine.

“Given the unprecedented nature of the current conflict and the uncertain economic environment,” Mastercard said it “has decided to suspend our network services in Russia.”

Russia’s central bank said some local lenders would use China’s UnionPay system instead.

The central bank has taken unprecedented measures in recent days, including capital controls, to support the struggling economy and the Russian ruble.

The national currency has lost about a quarter of its value against the US dollar since what the Kremlin called “a special military operation” in Ukraine that began last month.

The tanking ruble has brought back memories of the financial turmoil of the 1990s, when millions of Russians saw their savings evaporate due to currency devaluation and rising inflation.

compiled by Thapelo Lekabe† Additional reporting by AFP

READ NOW: Five reasons why Ukraine is blocking Russia’s advance

Leave a Reply

Your email address will not be published. Required fields are marked *