Ukrainian authorities are threatening to impose sanctions on the local subsidiary of Sberbank, Russia's main state bank, after Sberbank said it would recognize passports issued by Russia-backed separatists in eastern Ukraine.
The Ukrainian central bank (NBU) made a statement on March 7, after Sberbank said it would comply with Russian President Vladimir Putin's February 18 decree ordering Russian authorities to recognize identity documents issued by separatists who hold parts of Ukraine's Donetsk and Luhansk regions.
It said that if Sberbank's acceptance of separatist-issued documents was confirmed, the NBU would ask Ukraine's National Security and Defense Council to impose sanctions on the Russian bank's subsidiary in Ukraine.
It did not specify what measures it would seek, and added that the sanctions would be subject to approval by President Petro Poroshenko.
The bank issued its statement after Interior Minister Arsen Avakov called for a ban on Sberbank's operations in Ukraine.
Putin's decree has been criticized by Kyiv, Western governments, and international groups that say it violates or will undermine the European-brokered Minsk peace accords.
The Minsk accords are aimed at ending the war between the government forces and the Russia-backed separatists, which has killed more than 9,750 people since April 2014.