Suspicious Transactions: Russian Banks Slam the Brakes in 2024
Banks in Russia decline processing approximately 500 million rubles' worth of transactions
Nowadays, it's the norm for Russian credit institutions to shut down dubious transactions worth more than half a billion rubles, according to Galina Bobrysheva, Deputy Director of the Federal Financial Monitoring Service, unveiled at the XVI International Economic Forum "Russia - Islamic World: KazanForum."
As reported by Prime news agency, during the 2024 financial year, Russian banks blocked high-risk transactions totaling a hefty 500+ billion rubles.
In stark contrast, two decades ago, the idea of a bank refusing to process a questionable transaction was unprecedented in the Russian banking industry, Bobrysheva explained.
"The reason being, a transaction might exhibit tell-tale signs of funds being diverted to the black market, or conversely, illicit funds being laundered," the Rosfinmonitoring representative clarified.
Back then, the prevailing mentality was that any transaction would clear without a hitch. But times have changed!
Russian Banking Regulations: A Tale of Two Decades
Since the early 2000s, Russia has tightened its grip on money laundering through successive policies, heavily influenced by domestic regulations and international sanctions. These measures have grown increasingly stringent, particularly in response to financial sanctions, anti-money laundering (AML) regulations, and the annexation of Crimea in 2014.
The 2000s: Laying the Foundation
- Legal Groundwork: Between 2000 and 2009, Russia started building its legal framework to combat money laundering. Early regulations focused on implementing Know Your Customer (KYC) procedures and reporting suspicious transactions.
The 2010s: Strengthening the Structure
- Enhanced AML/KYC Measures: From 2010 onward, Russia continued to beef up its AML/KYC regulations. This included strengthening existing measures for detecting suspicious transactions and ensuring compliance with international sanctions.
The 2020s: Shaking Things Up
- Massive Sanctions and Escalating Restrictions: The 2020s have seen an intensification of sanctions against Russia, especially in the wake of the conflict in Ukraine. This has led to a significant increase in compliance complexity for Russian banks. They must now navigate a tangled web of restrictions, covering financial transactions, technology, and asset freezes[3][5].
- Technological Advances: The use of technology in AML/KYC has flourished, with banks turning to advanced systems to pinpoint suspicious activity more effectively.
In this ever-changing landscape, Russian banks are compelled to stay one step ahead, ensuring they don't become unwitting accomplices in money laundering or otherwise violation of international sanctions.
Moscow, Elena Volodina
© 2025, RIA "Novy Day"
- As a result of stricter regulations in the banking-and-insurance sector, Russian banks are now routinely blocking dubious transactions worth more than half a billion rubles, unlike two decades ago.
- In the 2020s, the Russian banking industry is heavily influenced by international sanctions and anti-money laundering (AML) regulations, necessitating Russian banks to employ advanced technology in their AML/KYC measures to effectively detect and prevent suspicious finance transactions.
