Banks in Turkey reportedly begin cutting ties with Russian banks

Turkish banks have begun refusing to work with Russian banks, Kommersant reports citing sources working in the financial market and foreign trade.

According to Kommersant, Turkish banks have terminated correspondent banking relationships with almost all Russian credit institutions and have also suspended payment processing without formally terminating contracts. One source noted that Turkish banks have made an exception for foreign subsidiary banks in Russia.

Sources told Kommersant that the situation became more complicated in the summer of 2023 and then significantly worsened after December 22, when U.S. President Joe Biden issued an executive order imposing secondary sanctions against foreign companies assisting Russia in the war. The order allows U.S. authorities to disconnect foreign banks from the U.S. financial system for violating sanctions against Russia.

On January 16, a source in Turkey’s banking sector told TASS that Turkish banks are “in a holding pattern” due to Biden's order, as the document employs broad language that requires additional clarification.