Sberbank In Discussions For China Banking Operational License
Russia’s Sberbank plans to open a branch in China in addition to a representative office, and is negotiating with the local regulator, the bank has said. “We are working our way in with the People’s Bank of China,” Alexander Vedyakhin, first deputy chairman of the Sberbank executive board, said at the Finopolis forum, when asked by first deputy chairman of the Central Bank of Russia Vladimir Chistyukhin why Sberbank did not have an operational banking license in China.
Vedyakhin added that despite this, Sberbank effects payments to China. It is not necessary to have a representative office abroad in order to make payments in national currencies, he noted.
Sberbank currently has a representative office in China, however this may not provide full banking services, where a branch office may offer some limited services.
Russian businesses have found it difficult to open bank accounts in China (and Hong Kong) due to Chinese banks reluctance to take on the risk of US secondary sanctions which could damage their international business operations. With over 160 countries signatory to China's BRI alone, Chinese banks have a huge global imprint. This hasn’t deterred some Russian investors from operating in the China market, for Russian Representative Offices in China, which operate on a cost basis, it is possible to send the finances into China to pay for ongoing overheads.
However for transactional businesses requiring normal cashflow inflows and outflows the situation is far more complex, although solutions can be found if the parent company is able to devoid itself of apparent Russian shareholders or appoint proxies.
Other Russian businesses have set up subsidiaries in alternative Asian countries instead, such as India, Indonesia and Vietnam to handle China trade. Dezan Shira & Associates Russian desk is able to assist with such structures: please contact Maria Kotova at email@example.com for assistance. The firm has advisory offices throughout Asia and can also advise as and when Sberbank facilities are available in China.