ALBAWABA — The Central Bank of the United Arab Emirates has granted a license to Russia’s MTS Bank, according to the CBUAE website, the Financial Times reported on Wednesday.
The move giving the first foreign bank in several years a license risks intensifying concerns among western nations over the U.A.E. becoming a potential financial safe haven working in Russia’s favor since MTS does not face the same restrictions as some banks and energy companies hit by Western sanctions.
The CBUAE had granted the license in December 2022 but the bank then sought the approval of the Central Bank of the Russian Federation, according to Russian daily newspaper — Kommersant.
The fintech unit, also operating in Abu Dhabi, of Russian telecommunications firm Mobile TeleSystems, which bought the last 4.5 percent of the bank’s shares that were previously controlled by billionaire Vladimir Evtushenkov’s Sistema on Dec. 26, 2019. Sistema holds a 42.09 percent stake in MTS.
The bank would open a new channel for the flow of money into the U.A.E. and meet the growing demand for financial services from Russian expatriates with many complaining of difficulties in opening bank accounts, especially corporate facilities.
“It’s all about the business case [and] the number of Russians living here now,” one person briefed on the decision told the Financial Times.
Russians were the top non-resident buyers of residential property in Dubai in the third quarter, consultancy Betterhomes said in October, as they sought a safe haven from the Ukraine conflict, escaping financial restrictions in Europe or avoiding the military draft back home.
Since the U.A.E. is a member of the OPEC+ oil cartel it maintains good ties with Russia despite Western pressure to help isolate the country over its invasion of Ukraine.
Ilya Filatov, chairman of the management board at MTS Bank, visited the U.A.E. last week as the lender prepares to roll out services in the coming months.
