FRANKFURT (Reuters) – A Russian court has frozen shares in the local arm of Raiffeisen Bank International, Russia’s largest Western bank said on Thursday, ruling out any sale of the company for now.
The Austria-based Reserve Bank of India had pledged to spin off its Russia business, which provides a payment lifeline to hundreds of companies there, after coming under pressure from international regulators. But more than two years into the war between Russia and Ukraine, little has changed.
The move, the largest such freeze on a Western bank in Russia, represents an escalation in the confrontation between Moscow and the West.
A spokesman for the bank said the Russian court ruling ruled out a sale of the bank, although they said it would have no impact on the Russian bank’s operations or on efforts by the European Central Bank to shrink it.
“We can still appoint management and give instructions to the Russians, but we cannot sell the bank,” they said.
The Reserve Bank of India said in a statement that it would try to reverse the court’s decision.
A source told Reuters that Russian authorities had made clear to the Reserve Bank of India, which has about 2,600 corporate clients, 4 million domestic account holders and 10,000 employees, that they wanted it to stay because it enables international payments.
The Reserve Bank of India is a vital financial lifeline for millions of Russian customers who want to send euros or dollars abroad. Western regulators want to change that. The European Central Bank wants the bank to scale back its activities in Russia.
With its sprawling industrial estate, more than 18 million customers from Vienna to Moscow and 44,000 employees, the Raiffeisen Group is the financial hub of Austria and most of Eastern Europe.
Russia has become a bigger source of funds for the bank since the Ukraine war began in 2022. Russia accounted for about half of the group’s profits in the first three months of this year as fees on payments abroad rose.
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