The UK has imposed sanctions on Capital Bank, owned by the Kyrgyz Ministry of Finance

The United Kingdom has announced sanctions against Capital Bank of Central Asia, a state-owned bank in Kyrgyzstan through which the country's authorities have centralized settlements and transfers in Russian rubles in recent months.

According to the updated sanctions list of the UK Office of Financial Sanctions Enforcement (OFSI) published on August 20, a number of restrictions have been imposed on the bank. In particular, the bank's assets have been frozen, a ban on correspondent relations and payments has been imposed, restrictions on the provision of trust services have been introduced, and directors have been disqualified.

The bank came under scrutiny in London for allegedly “participating in obtaining benefits from the Russian government and supporting its economic activities.” An official statement noted that Capital Bank operated in a financial services sector of strategic importance to the Kremlin and was of economic significance to Russia.

In April this year, the republic's cabinet approved a decree granting Capital Bank the status of a clearing center for all ruble transfers. It handled transactions of individuals and legal entities, as well as exchange transactions exceeding 3 million rubles per client per month. The Kyrgyz authorities said the aim of the project was to “increase transparency and control over cross-border transfers.”

In early April, 100% of the bank's shares were transferred to the Kyrgyz Ministry of Finance, turning it into a de facto state instrument for managing ruble settlement flows.