NUR-SULTAN -- Kazakh banks have started to tighten procedures for issuing payment cards to Russian citizens amid sanctions imposed on financial institutions across Russia over Moscow’s unprovoked invasion of Ukraine.
Since Russia launched its war against Ukraine on February 24, banks in Kazakhstan have been flooded by tens of thousands of Russian citizens seeking to open bank accounts and obtain Mastercard and VISA credit cards after the global payment giants suspended operations in Russia due to the sanctions, which have crippled international financial transactions in the country.
Because of the deluge of applications, some Kazakh banks have started requesting proof of permanent residence or work permits from Kazakh citizens for Russian citizens who want to set up accounts.
Media reports cited several bank officials as saying that the uncontrolled issuance of payment cards to Russian citizens may lead to Western sanctions against them.
Arlen Moldabekov, a top official at Kazakhstan’s central bank said on May 25 in a televised interview that, although local laws allow nonresidents to open accounts at Kazakh banks, financial institutions have the right to request such documents from potential clients.
"When issuing payment cards, our banks follow legal requirements, as well as internal regulations and the requirements of the banks' compliance control systems. They also comply with the regulations of the international payments systems, of which they are members, and whose cards they issue," Moldabekov said.
After VISA and Mastercard suspended their partnership with Russian banks in March, Russian citizens rushed in droves to Kazakhstan and other former Soviet republics seeking payment cards, among other things, at banks.
Last week, the Interior Ministry in Nur-Sultan said that 34,960 Russian citizens had obtained Kazakh Individual Identification Numbers (INN) in the period between February 24 and May 17, while 606 Ukrainian nationals obtained Kazakh INNs during the same period.
An INN allows individuals to get social benefits and simplifies the process of opening bank accounts in Kazakhstan. One of Russia's most-popular singers, Lev Leshchenko, was seen earlier this month at a social services office in Kazakhstan where he obtained an INN.
Kazakhstan's Agency of Financial Control has said about 9.2 billion tenges ($21.5 million) belonging to Kazakh citizens have been frozen in the branches of several Russian banks in Kazakhstan due to the international sanctions.