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Russia to create its own national payment system, Putin says

 

President Vladimir Putin on Thursday said Russia should create its own national payment settlement system, in a bid to reduce economic dependence on the West amid the controversy over Moscow's seizure of Crimea.

"In countries such as Japan and China these systems work, and work very well," Putin told lawmakers in televised remarks.

"Initially, they started out solely as national systems limited to their own markets, their own territory, their own population but they are becoming more popular right now."

"Why should we not do it? We should definitely do it and we will do it," he said, noting that Russia's Central Bank and the government have been looking into the matter.

Last week the United States hit more than 20 Russian officials, including some of Putin's closest allies, with sanctions over Moscow's takeover of Ukraine's peninsula of Crimea. A lender described as a "crony bank" for the Russian elites, Bank Rossiya, was also blacklisted.

As a result of punitive measures, several banks last week saw their customers barred from using Visa (NYSE: V - news) and MasterCard credit cards prompting talk among officials and lawmakers that Russia should create its own operational network.

"It's a great shame that some companies have taken a decision on certain restrictions," Putin said.

"I think it will simply lead to a loss of certain segments of the market for them, and a rather profitable market at that."

"We should protect our interests and we will do it."

Finance Minister Anton Siluanov said on Wednesday that the government had no plans so far to ditch Visa and MasterCard.

"But at the same time we are beginning to pay more attention to the creation of our own payment settlement system."

US President Barack Obama has threatened to target the broader Russian economy if Moscow moves into east Ukraine after its takeover of Crimea.

This week, Washington and its partners in the G8 club of leading industrialised countries cancelled an upcoming summit in the Black Sea resort of Sochi in a bid to punish Russia further.

Putin has shrugged off the sanctions, insisting Moscow will conduct an independent foreign policy and would not take orders from the West.

Ratings agencies Standard and Poor's and Fitch last week revised Russia's outlook to negative from stable, citing the direct and anticipated impact from the sanctions and the country's increasing isolation.

Some Russia officials dismissed the revision, claiming the move was politically motivated.

Economy Minister Alexei Ulyukayev warned earlier Thursday that the country risked growth of just 0.6 percent this year with capital flight expected to reach $100 billion.