The UAE Central Bank decided to revoke the license of MTS-Bank

The license of the UAE Central Bank allowed MTS-Bank to open a branch in Abu Dhabi. The bank received this permission last year, but last February it was sanctioned by the UK and the US.

The Central Bank of the United Arab Emirates cancels the license from MTS Bank, according to the website of the regulator. He made the decision a month after the US and UK imposed blocking sanctions on the Russian bank.

“The Central Bank of the UAE has announced that it has decided to revoke the license of MTS Bank in Abu Dhabi, curtail its operations under the supervision of the Central Bank within six months from the date of the decision and close the branch. This decision was made after considering the available options regarding the new status of MTS Bank, as well as taking into account the sanctions risks associated with the bank after the status was assigned, ”the country’s Central Bank said in a statement.

During the liquidation, a branch of a Russian bank "will be prohibited from opening new accounts and conducting operations, except for the repayment of previously assumed obligations, and the bank's use of the Central Bank's payment systems will be limited only for this purpose."

“Within six months, MTS Bank will continue to fulfill all its obligations in terms of settlements to existing customers and guarantee the safety of their funds,” the MTS Bank said.

MTS-Bank received a license from the UAE Central Bank last year, follows from its identification number. The regulator noted that the permit was issued based on compliance with the licensing criteria for branches of foreign banks. “The bank has contributed to supporting legitimate trade between the two countries and serving the Russian community in the UAE,” the Central Bank noted.

The United States and Great Britain imposed new sanctions against Russian banks on February 24 of this year, including MTS Bank. The restrictions mean blocking all assets located in these jurisdictions, stopping operations in dollars and pounds, as well as the risks of secondary sanctions against partner companies.

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After the inclusion of MTS Bank in the sanctions lists, the Central Bank of the UAE said that it would study options for its further work in the country: “The Central Bank is currently studying the options available in connection with the new status of the bank and will make an appropriate decision in this regard in a timely manner, taking into account the obligations previously taken by the branch [of the bank].”

Sberbank is also forced to close its branch in the UAE due to sanctions. “Unfortunately, in the context of sanctions restrictions, we are facing serious restrictions on the work of our Sberinvest Middle East Limited office in Abu Dhabi. And we regretfully have to close it in the first quarter of 2023,” said Alexander Vedyakhin, First Deputy Chairman of the Board of the Bank. However, according to him, Sberbank will continue to serve customers in this market. Sberbank has been under US blocking sanctions since last April.

Sberbank received permission to open a representative office in Abu Dhabi in the fall of 2020 and created its “daughter” Sberinvest Middle East Limited in the UAE. She was authorized to provide investment advice and arrange transactions and loans, as well as activities regulated by Sharia law. The license to operate Sberinvest was handed over last February.