Russia may face slower economic growth and lower credit rating in future due to this sanction imposed by the U.S. and EU (Creative Commons/DonkeyHotey)

At least four banks are affected by the sanction so far, all of which have affiliation with highly ranked government officials and businessmen that are blacklisted by the U.S.

Meanwhile, the Russian banks have described the termination of credit service as “unlawful”, since no warning was given prior to the credit freeze.

One of the banks affected was Bank Rossiya—15th largest in Russia with assets of $12 billion. According to BBC, President Vladimir Putin is stepping in personally to counter the sanction, promising to open an account and transfer his wages there. Putin has also ordered support from the Russian central bank if needed.

SMP Bank, Sobinbank and InvsetKapitalBank were also subjects of MasterCard and Visa’s credit sanction.

Russia’s stocks dropped drastically as investors’ pessimism grew. Since President Obama’s announcement of the further sanctions, MICEX index, which is priced in roubles, fell as much as 3% and the RTS, which is the priced in dollars fell 3.6%, BBC reported.

The slumps in shares have now affected multiple sectors in Russia including its mining, defense and natural resources. Natural gas giant Gazprom, for instance, was down 0.9% while Russian steel company NLMK closed 1.94% lower.

Furthermore, Germany confirmed its suspension of all defense-related exports to Russia on Friday.

The condemnation from the West over Russia’s ‘illegitimate’ control over Crimea lead to the economic sanction predominantly from the U.S. and EU, which may hinder Russia’s economic growth severely in long-run.

According to rating agencies S&P and Fitch, Russia’s private sectors may have to rely on official support as U.S. and EU banks and investors are becoming more reluctant to lend to Russia under its current economic status.

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