The Bank of Russia said on February 21 that it had revoked the banking license of Qiwi Bank for engaging in what it described as high-risk operations after a series of warnings, a step that sent its Moscow-listed shares plummeting 25% to a more than one-year low.
The Bank of Russia said Qiwi Bank had systematically violated requirements on anti-money laundering and terrorism financing legislation.
"Qiwi Bank did not take effective measures to reduce risks in its activities, despite the Bank of Russia's active supervisory work, and continued conducting high-risk operations," the Russian central bank said.
The Russian central bank, which took regulatory action against Qiwi five times in the last year, said the bank had violated federal laws regulating banking activities.
Reuters says Nasdaq-listed Qiwi QIWI.O, a payment services provider, said in January it had entered into an agreement to sell its Russian assets and thus completed a restructuring process.
Trading of its American Depositary Shares on Nasdaq has reportedly been suspended since soon after Russia dispatched troops to Ukraine in February 2022. Its Moscow-listed depositary receipts QIWIDR.MM plunged 24.9% as of 0720 GMT, according to Reuters.
The Moscow Times reports that the Russian central bank said that Qiwi’s activities “were characterized by involvement in high-risk operations aimed at settlements between individuals and the black market, including transfers of funds to crypto exchanges, illegal online casinos, bookmakers, etc.”
The Russian financial regulator reportedly said the Deposit Insurance Agency of Russia will assume the functions of temporary administration over Qiwi Bank.
According to media reports, clients were blocked from transferring funds to and from their Qiwi wallets and the Qiwi-owned money transfer system Contact following the news.
It is to be noted that Tajik labor migrants working in the Russian Federation have actively used the Contact money transfer system to remit money to their families in Tajikistan.
In addition to personal wallets, Qiwi Bank’s stripped license has knocked off Qiwi’s outdoor payment terminals that receive payments for housing, utilities and other services, according to The Moscow Times.
The revoked license has also disrupted online payments for telecom services at four major banks that used Qiwi’s payment system, including Raiffeisenbank.
The Deposit Insurance Agency of Russia later confirmed that it would refund Qiwi Bank’s clients up to 1.4 million rubles (US$15,000) within 30 days if they prove to be account holders.
