Kazakhstan’s VTB Bank Starts Issuing Russian MIR Credit/Debit Cards
The Russian-owned Kazakh subsidiary of VTB Bank has begun issuing Russian MIR cards for its retail customers. At present, these are virtual payment cards, although plastic versions are scheduled to be issued during Q1 2023.
VTB Russia is sanctioned by the United States and European Union, however Kazakh banks have received permission from the United States Treasury Department’s Office of Foreign Assets Control (OFAC) to conduct transactions with the payment cards of Russia’s MIR system, according to Kazakhstan’s Financial Markets Regulator, who stated “On December 8, 2022, regulators received a letter from OFAC, in which the U.S. agency explained that it did not object to individuals using the bank cards of the MIR system, namely citizens who have migrated from Russia to Kazakhstan, in order to conduct transactions that ensure their livelihoods. Customers can use MIR cards in the VTB KZ Online app, make online purchases and receive money transfers from MIR cards issued by other banks. VTB Kazakhstan will start issuing plastic MIR cards in the first quarter of 2023.”
Depositing money into a virtual card account can be done through a transfer from the client’s banking app, via a transfer from another MIR card or a third-party bank, or through ATMs or bank cash desks.
VTB Kazakhstan retail director Stanislav Kozyakov confirmed the move, stating that “The quality of banking services and timely financial solutions remain our top priority. Understanding the importance of providing access to MIR accounts, we continue to fully support MIR cards in Kazakhstan. This year we have doubled our ATM network to accept MIR cards. Today we issue a virtual MIR card to allow our customers to make online transactions. At the beginning of next year, we will be issuing plastic MIR cards.”
VTB Kazakhstan supports both MIR cards issued by any bank without limits on withdrawals or the number of transactions.
The cash withdrawal fee on the MIR virtual card issued by VTB Kazakhstan at ATMs and bank outlets is 1% and at other Kazakhstan and foreign banks is 2%. The minimum fee is 500 tenge (US$1.08).
VTB plans to maintain a presence in China, India, Vietnam, Armenia, Azerbaijan and Kazakhstan, where branches and subsidiaries will give it a stable channel of communication with friendly countries, VTB chief Andrei Kostin said at the beginning of September.
Kazakh-Russia trade is up about 5% in 2022, with exports of goods from Kazakhstan to Russia increased by 15.1%, according to Kazakhstan’s Finprom.
From January to September this year, trade turnover between Kazakhstan and Russia reached US$18.4 billion. Imports from Russia still make up a large share of the mutual trade turnover.
Although the news will be welcomed by Russians based in Kazakhstan, who will be able to access their personal and corporate bank finances in Russia from Kazakhstan, there are many in Kazakhstan and especially Russia who feel that requiring United States approval to operate cross-border banking systems between them is a violation of sovereignty and indicative of the ‘unipolar’ world in which the United States controls what happens in other countries.
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