Several banks in Uzbekistan suspended international money transfers through the Contact payment system following the decision of Russia's Central Bank to revoke the license of QIWI Bank and curtail operations associated with the Contact international money transfer system, as per media reports.
Suspension by Uzbek Banks
Prominent banks in Uzbekistan, including "Aloqabank," "Xalq Banki," "Turonbank," "Garant Bank," "Mikrokreditbank," "Universalbank," and "Poytaxt Bank," have announced the cessation of operations under the Contact system. Given that the Contact money transfer system is owned by QIWI Bank, its restriction is a direct consequence of the license revocation by the Central Bank of Russia, citing "high-risk operations."
On February 21, several commercial banks in Uzbekistan initiated the suspension of the Contact payment system. Xalq Banki was among the first to issue corresponding announcements. Banks cited "technical reasons" for terminating Contact system services and recommended alternatives such as Asia Express, Sberbank Online, and UPT.
Impact on Uzbek Banking Sector
The suspension of Contact services has led to inconvenience for Uzbek banks, prompting them to advise clients to utilize alternative money transfer systems like Western Union, Zolotaya Korona, Visa Direct, MoneySend, MoneyGram, and Money Express. This shift comes as the demand for Contact system among Russian citizens residing abroad surged following sanctions against Unistream in July 2023.
Regulatory Actions and Client Compensation
Accusing QIWI Bank of conducting "high-risk operations" and unauthorized use of personal data, the Central Bank of Russia has initiated actions to safeguard depositors' interests. The Bank stated that QIWI Bank's clients would be refunded up to ₽1.4mn ($15,000) of their deposits. Furthermore, the Bank of Russia has referred information on potential criminal activities related to QIWI Bank's operations to law enforcement authorities.
Follow Daryo's official Instagram and Twitter pages to keep current on world news.
Comments (0)