December 4, 2019 / 11:17 AM / 2 months ago

Remittance-dependent Tajikistan blocks Russian wire transfer service

DUSHANBE/MOSCOW, Dec 4 (Reuters) - A Russian wire transfer service popular among Tajik migrant labourers has been cut off from the Central Asian nation’s banking system, it said on Wednesday, after Dushanbe rerouted all remittances into a new processing centre.

More than a million Tajiks work in Russia, sending home about $2.6 billion a year or more than a quarter of the country’s gross domestic product, mostly through instant money transfer systems such as Koronapay and Western Union.

“For reasons beyond our control, it has been impossible for us to connect to the National Processing Centre of the National Bank of Tajikistan,” Koronapay, which operates one of Russia’s largest money transfer networks, said in a statement.

“There are some legal issues that need to be resolved as well as technical integration matters which were supposed to be resolved by the National Bank of Tajikistan.”

Tajikistan’s central bank said this week the regulatory changes were necessary to protect Tajik banks from counterparty risks and to combat money laundering and financing of criminal activities including terrorism.

In a statement on Wednesday, the central bank said most of the wire transfer systems have been connected to its processing centre, but Koronapay “has failed to ensure compliance” with Tajik law. It provided no details and urged Tajiks to use other money transfer services. (Reporting by Nazarali Pirnazarov in Dushanbe and Tatiana Voronova in Moscow; Writing by Olzhas Auyezov; Editing by Alex Richardson)

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