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Russians in Vietnam cut spending as EU imposes sanctions on Russian banks

Russians in Vietnam cut spending as EU imposes sanctions on Russian banks

Thursday, March 03, 2022, 18:06 GMT+7
Russians in Vietnam cut spending as EU imposes sanctions on Russian banks
Russian tourists shop at a jewelry store in Nha Trang City, Khanh Hoa Province, Vietnam. Photo: Minh Chien / Tuoi Tre

Russian nationals in Vietnam are tightening their belts over worries that their Visa and Mastercard cards might be declined following announcements that the European Union (EU) has cut off several Russian lenders from the SWIFT messaging system.

Russian banks VTB, Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, and VEB will each be given ten days to wind down their SWIFT operations, Reuters quoted the EU as saying in its official journal on Wednesday. 

SWIFT is the dominant messaging system underpinning global financial transactions for 11,000 member institutions in 200 countries and territories.

Russia has the second-largest number of users after the U.S., with some 300 Russian financial institutions relying on the system, more than half of the country’s financial institutions, according to the Russian National SWIFT Association.

Despite the existence of a Russian financial messaging system, SWIFT is still used for some 70 percent of transfers in Russia. China also has its own system, but it is relatively limited, Reuters reported.

Sberbank, Russia’s largest lender, and Gazprombank have not been included in the list because they are the main channels for payments for Russian oil and gas, which EU countries are still buying. 

The two banks are subject to other measures, Reuters quoted an EU official as saying.

Larisa and her husband during their trip to Hoa Lan Island off Khanh Hoa Province, Vietnam. Photo: Minh Chien / Tuoi Tre

Larisa and her husband during their trip to Hoa Lan Island off Khanh Hoa Province, Vietnam. Photo: Minh Chien / Tuoi Tre

In this context, many Russian people visiting Vietnam are cutting expenses over uncertainty about payment systems and cash withdrawal in the near future.

“I’ll have to carefully spend the amount of cash I carry with me in case banks cannot process transactions, even though I have a lot of shopping and entertainment needs,” said Larisa, a Russian from Tyumen City currently on vacation in Nha Trang City, located in the south-central Vietnamese province of Khanh Hoa.

While his Visa debit card still works, Nikolay Diachenko, a Russian from Moscow, said he plans to withdraw extra cash to cover spending during his ongoing holiday in Nha Trang.

“I don’t know what will happen in the future, so withdrawing and using cash are a safe measure for me at this time,” Diachenko said. 

“Currently, it costs far more to exchange the Russian ruble for the U.S. dollar so spending and shopping must be reduced. 

“I hope payments via services like Visa or Mastercard continue to be normal in the near future.”

Nikolay Diachenko (left) visits Khanh Hoa Province, Vietnam. Photo: Minh Chien / Tuoi Tre

Nikolay Diachenko (left) visits Khanh Hoa Province, Vietnam. Photo: Minh Chien / Tuoi Tre

Man Tuan Thuan, the manager of an agricultural product showroom in Nha Trang, said Russian tourists have cut down on their shopping by nearly fifty percent over the past two days.

Nguyen Duc Tan, general director of Anex Vietnam Trade and Tourism Company, expects that the international payment of his Russian customers will be difficult to receive given the exclusion of seven Russian banks from the SWIFT messaging system.

“Although international debit cards still work during the ongoing Russia-Ukraine military confrontation, it remains unclear whether Russian people will be able pay with credit cards,” Tan said, adding that his company has prepared a plan to respond to those problems and is going ahead with its welcoming of Russian visitors to Nha Trang on Thursday.

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