Russia’s two largest banks plan SWIFT alternative

[senheiser]

Russia’s two largest banks plan SWIFT alternative
Published time: October 13, 2014 13:13
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RIA Novosti / Evgeny Biyatov


The two biggest banks in Russia, Sberbank and VTB, are in talks to create an alternative to the SWIFT global system for interbank financial communications, VTB head Andrey Kostin said.

According to Kostin, Russia has two options: either use the system run by the Russian Central Bank or create a new homegrown transaction platform.

“There is an alternative, we can use the Central Bank system that is already in operation, and we may make our own, we are already in discussions with Sberbank,” Kostin told reporters in Washington DC, where he is for the annual fall meetings of the International Monetary Fund (IMF) and World Bank.

However, the catch with the Central Bank’s international transaction system is the price.

“It’s expensive, in fact several times more expensive than the SWIFT payment system,” the VTB head said.

“If we create our own interbank system, which isn’t difficult at all and we are in the process of doing, it will be cheaper. And then hold talks with the Central Bank,” Kostin said.

Switching Russia off SWIFT, the Society for Worldwide Interbank Financial Telecommunication, would instantly isolate it from global finance, as happened with Iran in 2012. According to reports, EU leaders, especially in Britain, were discussing the option as a sort of super sanctions to punish Russia for its involvement in the Ukraine crisis. Many US senators have also been pushing to block Russia from SWIFT payments.

SWIFT, the Brussels-based global payments system, said last week that they wouldn’t succumb to political pressure and cut Russian payments and would continue services. The group said that disconnecting Russia violates the company’s mission and that it doesn’t make such unilateral decisions.

However because it’s based in Brussels, it would have to comply with any greater EU ruling.

Last month the SWIFT system transmitted more than 21 million financial messages a day between more than 10,500 financial institutions and corporations in 215 countries.

The Russian National SWIFT Association, or ROSSWIFT for short, is the second biggest worldwide, after the US.

 

[Bas_kya_bhai]

go the IK way... use HUNDI.

 

[AZADPAKISTAN2009]

Long over due , Russia / China should propose a alternative Payment system and most countries would follow who want to trade with Giant Economies of Future

 

[Bas_kya_bhai]

brazil.. russia china southafrica should unite to offer a new system and alternative to $ .

 

[mike2000]

brazil.. russia china southafrica should unite to offer a new system and alternative to $ .

Easier said than Done. Most of the Brics countries dont trust each other much, and dont have much in common apart from being 'developing' countries. Moreover Russia will isolate itself from global finance(which will affect its economy even more) if it left SWIFT to create its own.

 

[senheiser]

Easier said than Done. Most of the Brics countries dont trust each other much, and dont have much in common apart from being 'developing' countries. Moreover Russia will isolate itself from global finance(which will affect its economy even more) if it left SWIFT to create its own.

nope we would we would recreate software and make compatible with swift but remove western administration and then promoting it worldwide

 

[Beidou2020]

Easier said than Done. Most of the Brics countries dont trust each other much, and dont have much in common apart from being 'developing' countries. Moreover Russia will isolate itself from global finance(which will affect its economy even more) if it left SWIFT to create its own.

Wrong.

An alternative SWIFT is being created right now which will make Western sanctions using SWIFT as a sanctions tool utterly irrelevant.

An alternative SWIFT is to break the monopoly of the West in this area.

Many countries will join the alternative SWIFT to diversify risks, especially countries that oppose Western thuggery.

SWIFT is a financial messaging system, its fairly easy to establish an alternative and the only reason it hasn't been established until now is that SWIFT was not used as a sanctions tool so no one really needed an alternative for it. But the West has used it as a sanctions tool and given an incentive for others to create an alternative.

Anything the BRICS join will become relevant as the sheer size of the group means what actions it takes has global implications.

It's similar to the BRICS development banks and currency fund. That broke the monopoly of the West in providing development money and IMF in providing foreign currency reserves.

BRICS is all about breaking the monopoly of the West in all areas.

 

[faisal6309]

brazil.. russia china southafrica should unite to offer a new system and alternative to $ .

Why didn't you mention Indian isn't it a part of BRICS