Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Central Bank Cracks Down on Exchanges

The Central Bank has stepped up raids on the country's mushrooming foreign-exchange offices to force them to comply with regulations, a senior bank official said Tuesday.

Viktor Melnikov, head of the Central Bank's currency control and regulation department, said the clean-up was launched because up to a third of exchange offices in Russia could be operating without official permission.

The state bank began to crack down on exchange offices last year for refusing to accept old and worn banknotes, but lacked the staff for regular raids.

Walking into such offices, clients felt more like they were facing a gang of thugs than a proper exchange business, said Melnikov.

"We, as the Central Bank, want to upgrade the level of services delivered by exchange offices. Needless to say, if you want to change some dollars in Moscow, it's a risky affair and you are never safe when left alone with those 'new businessmen,' who look more like criminals," Melnikov said.

"This is how you tell the immediate difference between London and the Russian capital."

The Central Bank has already checked the accounts of about 900 exchange offices in Moscow opened by some 101 commercial banks, he said. Of these, 165 offices did not correspond to "civilized standards." Criminal investigations were launched against 14 of them, he added.

(Reuters, MT)