A select group of Russian banks are to be excluded from the Swift financial messaging system as part of a package of new financial sanctions agreed by Western allies.
Pressure had been building on EU leaders to cut Russia off from Swift in response to the escalating military crisis in Ukraine.
Announcing the measures on Sunday, EU president Ursula von der Leyen, said: "Important Russian banks will be excluded from the Swift system. We will also ban the transactions of Russia's central bank and freeze all its assets, to prevent it from financing Putin's war."
The banks affected were not immediately named, but a German spokesman said they would include "all those already sanctioned by the international community, as well as other institutions, if necessary".
Swift says it is preparing to implement the new measures in coming days. “We are engaging with European authorities to understand the details of the entities that will be subject to the new measures and we are preparing to comply upon legal instruction."
The prime minister of Ukraine, Denys Shmyhal, posted on Twitter:
In a statement released ahead of the EU's decision, Sber, VTB, Alfa Bank and “Otkritie” sought to reassure customers: "It is of fundamental importance to us that millions of Russian families, notwithstanding their servicing bank, feel confident about the future, today and always, knowing their funds are safe.
"We believe it important to stress that each of the banks continues to provide services as normal and does all that is necessary to peacefully go through this challenging period. The banking community is prepared for various scenarios: we have enough liquidity to satisfy the demand, there are no restrictions for cash withdrawal either in ATMs or the banks’ offices. Amid the sanctions we coordinate our work, and together with the Central Bank ensure uninterrupted and steady operations."
Russia has developed an analogue of Swift, the SPFS system, to which any foreign bank, foreign company or foreign financial institution can freely connect.
Nevertheless, long queues were reported at ATM machines across Russia when news of the expulsion from Swift filtered through.