Days ago, the opening of a branch of the Novikombank bank in Havana made headlines, as part of the growing ties between Russia and Cuba. This was reflected in various media outlets, including OnCuba.
However, as the bank, belonging to the Russian state corporation Rostec, has later clarified, what really opened in the Cuban capital was a representative office. This, in practical terms, does not mean the same thing.
This is established by resolution 40/2024 of the Central Bank of Cuba (BCC), according to which what was previously granted to Novikombank was a representation license. Consequently, said license gave the green light to the opening of an office, but not a branch.
If the latter had been the case, the Russian bank could carry out in Cuba the traditional operations of these institutions such as deposits, loans, account openings and transfers, among others. This, in practice, would allow the attention of natural persons as clients.
On the other hand, according to the BCC resolution, the Novikombank representative office can only “manage, promote or coordinate the business carried out by its parent company, in freely convertible currency with entities established in the national territory.”
Likewise, the office is authorized to “manage, promote or coordinate the execution of correspondent agreements” between the Russian bank and financial institutions established in Cuba.
The rule explicitly says that Novikombank’s representation in Havana “acts by order and on behalf of its parent company.” Furthermore, according to the BCC, it is “prohibited from directly carrying out active or passive banking or financial operations of any kind in Cuba.”
The latter lies precisely in the fact that its operation will not be that of a branch.
However…
Despite the above, the fact that what Novikombank has now opened in Havana is a representative office and not exactly a branch does not mean that in the future – and perhaps sooner rather than later – this and other Russian banks will not be able to open branches in the island.
Both Cuban and Russian authorities have referred to the opening of the office as “a step” and even “a milestone,” which should mean “a before and after” in the already warm bilateral relations.
Russian bank branch in Cuba is part of “new approaches” between Russia and the island
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A statement from the Rostec corporation, cited by Russian media, states that “this step will contribute to achieving the strategic objective: guaranteeing stable payments between Russia and Cuba, as well as banking support for bilateral trade, economic and investment ties.”
For his part, Cuban Deputy Prime Minister Ricardo Cabrisas, who attended the opening of the Novikombank office on behalf of the island’s government, considered that this event “constitutes a fundamental and decisive action” for Cuba, and marks “a milestone.” in one of the most important sectors to develop any economic and financial relationship.”
“There is no trade or investment that advances if there is no effective participation of the banking system,” declared the deputy head of Government, for whom “the opening of the bank is a very important step that will be a sign of triumph for actions to reinforce commercial links.”
Cabrisas, during a working session of the Russian-Cuban Intergovernmental Commission last March, “reiterated Havana’s interest in opening branches of Russian banks on its territory,” according to Sputnik.
And previously, last year, Boris Titov, president of the Cuba-Russia Business Council, had noted “the interest” of the Cuban authorities in “registering branches of Russian banks” on the island, according to press reports.
In light of this interest, Vladimir Putin’s presidential advisor then explained that three Russian banks had submitted applications to the Central Bank of Cuba to open branches.
Therefore, the opening of a Novikombank representative office in Havana could well be the first step in a future larger-scale landing of other Russian banking entities on the island, not even with offices but with branches themselves.
Months ago, Russia had already activated access to Mir bank cards in Cuban payment terminals. And shortly before that, the use of the same cards in Cuban ATMs had been authorized, at a time when Russian tourism on the island is increasing and bilateral relations are strengthening.
