OCBC to halt all Russia-linked transactions

Singapore’s second-largest bank, OCBC, has announced it will stop processing all transactions related to Russia starting November 1, 2024. This decision, which impacts both corporate and private clients, directly responds to increasing operational challenges caused by global sanctions on Russia.

OCBC’s decision will affect a broad range of financial activities, including personal remittances, the sale or transport of goods and the provision of services tied to Russia. Its wealth management subsidiary, the Bank of Singapore, is set to implement the new restrictions as well. The bank has communicated this change to clients, emphasizing that the decision comes from the difficulties in ensuring compliance with expanding global sanctions.

This move aligns with global trends, where banks increasingly limit their exposure to Russia to avoid hefty fines and penalties for violating sanctions. For instance, a major U.S. bank was fined millions earlier this year for breaching sanctions. OCBC’s actions are in line with the heightened scrutiny financial institutions face as governments, especially in the U.S. and Europe, target Russia with ever-stricter regulations.

Though Singapore imposed unilateral sanctions on Moscow in 2022, targeting specific Russian banks and restricting certain trade activities, some financial operations continued for non-sanctioned entities. OCBC’s decision to completely halt Russia-linked transactions marks a significant shift in the local banking sector’s approach to compliance.