UAE Central Bank cancels licence of Russia's MTS Bank in Abu Dhabi

The lender will have to wind down its operations within six months from the date of the decision

The UAE Central Bank in Abu Dhabi. The regulator said the MTS Bank branch will be prohibited from opening accounts during the winding down process. Photo: UAE Central Bank

The UAE Central Bank has cancelled the licence of Russia's MTS Bank in Abu Dhabi due to the sanctions risks associated with the lender.

MTS Bank will wind down its operations “within six months from the date of the decision”, under the supervision of the Central Bank, before closing its branch, the regulator said on Friday.

“This decision comes after considering the available options regarding the new status of the MTS Bank, and taking into account the sanctions risks associated with the bank after the designation,” it said.

MTS Bank received approval last year from the Central Bank to operate in the UAE.

However, the bank came under western sanctions in February this year, as part of the broader package of sanctions by the UK, the US and their allies against Russian companies, the country’s financial institutions and people in the inner circle of President Vladimir Putin following the start of the Russia-Ukraine war.

During the winding down, the MTS Bank branch will be prohibited from opening accounts and conducting transactions, except for clearing prior obligations, the Central Bank said.

“The bank’s use of [the] Central Bank’s payment systems will be restricted to this purpose only,” the regulator said.

MTS Bank is a FinTech unit of Russia's largest mobile operator Mobile TeleSystems.