Qiwi Bank's troubles began with the Russian Central Bank's decision to restrict the bank's access to the Mir payment system. This system is used by many Russian banks to process payments, and Qiwi Bank was heavily reliant on it.
Qiwi Bank's business model is built around providing financial services to individuals and businesses, particularly in rural areas where traditional banking services are scarce. This has made it a crucial lifeline for many people.
As a result of the Central Bank's actions, Qiwi Bank's ability to process payments has been severely disrupted, causing significant financial losses for the company.
On a similar theme: Quickbooks Online Payments Bank to Bank
Russian Central Bank's Actions
The Russian Central Bank's actions had a significant impact on Qiwi Bank's operations. The Central Bank of Russia suspended Qiwi's payment system license in 2014, which affected the bank's ability to process transactions.
This move was a major setback for Qiwi, as it relied heavily on its payment system to generate revenue. The suspension was due to regulatory issues, including the bank's failure to meet Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
Qiwi was forced to reapply for its license and implement new compliance measures to regain its payment system license. The bank invested heavily in upgrading its systems and hiring additional staff to ensure compliance with regulatory requirements.
The Central Bank of Russia ultimately reinstated Qiwi's payment system license in 2015, allowing the bank to resume its operations.
Related reading: Cbn Has Revoked the Banking License of Heritage Bank.
Reasons for Revocation
The Bank of Russia revoked Qiwi Bank's license on February 21 due to high-risk transactions aimed at facilitating settlements between individuals and shadow businesses.
Qiwi Bank was involved in opening "Qiwi wallets" using the personal data of citizens without their knowledge.
The regulator cited cases of high-risk operations, including transfers of funds to crypto exchanges, illegal online casinos, bookmakers, etc.
Qiwi Bank systematically violated legal requirements in anti-money laundering and countering the financing of terrorism.
The bank's activities were characterized by involvement in high-risk transactions aimed at ensuring settlements between individuals and shadow businesses.
For more insights, see: Example of Shadow Banks
The Central Bank of Russia described Russia's 89th-largest bank as an "insignificant creditor in the real economic sector."
The regulator stated that it had recorded cases of Qiwi Bank looking for new ways to circumvent the restrictions imposed by the regulator.
The Deposit Insurance Agency of Russia will assume the functions of temporary administration over Qiwi Bank.
Clients were blocked from transferring funds to and from their Qiwi wallets and the Qiwi-owned money transfer system Contact following the news.
Qiwi Bank's stripped license has knocked off Qiwi's outdoor payment terminals that receive payments for housing, utilities, and other services.
The revoked license has also disrupted online payments for telecom services at four major banks that used Qiwi's payment system, including Raiffeisenbank.
Worth a look: Banking Russia
Frequently Asked Questions
Is QIWI available in USA?
QIWI Wallet is available in the United States, offering a convenient payment solution for nationals of this country. Learn more about QIWI's services and features for US users.
What happened to Qiwi Bank?
QIWI Bank's operations were suspended after the Central Bank of Russia appointed a temporary management team. The bank is currently under temporary management until a receiver or liquidator is appointed.
Is Qiwi a Russian company?
Yes, Qiwi is a Russian company. It provides payment and financial services primarily in Russia and CIS countries.
Is Qiwi Bank sanctioned?
No, Qiwi Bank is not sanctioned, but its banking license was revoked by the Bank of Russia due to high-risk operations.
Which countries accept Qiwi?
QIWI is available in over 20 countries worldwide, including Russia, Kazakhstan, and several countries in Eastern Europe, Latin America, and Asia. You can use QIWI payment services in a diverse range of international locations.
Sources
- https://www.themoscowtimes.com/2024/02/21/russian-central-bank-revokes-qiwi-banks-license-a84183
- https://www.intellinews.com/russia-s-cbr-shuts-down-major-e-payment-player-qiwi-313457/
- https://tass.com/economy/1773155
- https://sputnikmediabank.com/images/item/8625462
- https://thedeepdive.ca/russian-central-bank-revokes-qiwi-banks-license-following-violations-and-high-risk-operations/
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