The United Arab Emirates central bank will be cancelling the license given to Russian MTS Bank last year, after facing British and U.S. sanctions in February, the bank announced on Friday.
MTS Bank’s UAE branch, which is licensed in Abu Dhabi, will have its operations halted within six months, under the central bank’s supervision.
The Russian bank will fulfill all settlement obligations to current customers and guarantee the safety of their funds for six months, the bank said in a statement.
“This decision comes after considering the available options regarding the new status of the MTS Bank and taking into account the sanctions risks associated with the bank,” the UAE central bank’s statement mentioned.
During the next six months, the bank will not be allowed to open new accounts or conduct transactions that are not for clearing any obligations, using the central bank’s payment systems will be allowed for these transactions.
Russia’s largest mobile operator, Mobile TeleSystems, finetech unit, MTS Bank, is a part of a massive sanctions package, which includes 200 entities and individuals, announced in February.
Russian conglomerate, Sistema, holds a 42.09 percent stake in MTS Bank, Russian billionaire, Vladimir Yevtuskenkov relinquished formal shareholder control of Sistema after being sanctioned, transferring a 10 percent stake to his son.
The UAE has maintained good ties with Moscow, ignoring Western attempts to isolate Russia for its invasion of Ukraine, as it has not matched global sanctions imposed on Russia.