- Russian President Vladimir Putin called on Shanghai Cooperation Organisation (SCO) members to establish a development bank that would operate independently of financial systems he described as being used as “weapons” for economic leverage.
- At the 2026 SCO Summit in Bishkek, Kyrgyzstan, Putin emphasized that the proposed bank should be as independent as possible from financial systems of countries using economic instruments for unilateral advantages.
- Kazakhstan's President Kassym-Jomart Tokayev expressed support for China's initiative to establish an SCO Development Bank and offered to host the institution if member states reach a consensus.
- Tokayev highlighted that the bank's resources should primarily focus on infrastructure, technological, and industrial projects.
- Iranian President Masoud Pezeshkian proposed the creation of an SCO Bank, along with a joint export and investment insurance mechanism and an energy consortium.
- Pezeshkian stated that such initiatives could strengthen economic ties among SCO members and enhance the organisation's influence in the global economy.
- The proposal for the bank comes as Russia and Iran face extensive Western sanctions, prompting Moscow to seek reduced dependence on the US dollar and Western financial infrastructure.
- Putin noted that Russia's trade turnover with SCO countries exceeded $400 billion last year, with national currencies accounting for over 98% of mutual settlements.
- The proposed bank is part of a broader effort to develop financial mechanisms within the SCO, aiming to reduce reliance on Western infrastructure.
- The SCO has expanded since its establishment in 2001, with new members including India and Pakistan in 2017, and Iran becoming a full member in 2023.
At the 2026 SCO Summit in Bishkek, Kyrgyzstan, Putin called for a development bank to operate independently of Western financial systems, which he described as tools for economic leverage. He noted that Russia's trade turnover with SCO countries exceeded $400 billion last year, with national currencies making up over 98% of mutual settlements.128
Kazakhstan's President Kassym-Jomart Tokayev expressed support for the initiative, offering to host the bank's headquarters, emphasizing the need for resources to focus on infrastructure and technological projects. He highlighted that trade among SCO nations is nearing $1 trillion and called for reduced barriers and improved connectivity.
Iran's President Masoud Pezeshkian backed the proposal, suggesting the creation of a joint export and investment insurance mechanism. He argued that such initiatives could enhance economic ties and the SCO's global influence, advocating for greater regional cooperation based on mutual trust and respect for sovereignty.510
Despite the enthusiasm, challenges remain, particularly regarding member states' willingness to engage with a bank outside Western systems, given their existing ties to the global financial infrastructure. India and China are particularly cautious, balancing their economic interests with the need to avoid secondary sanctions.
“Russia's trade turnover with SCO countries exceeded $400 billion last year, with national currencies accounting for over 98% of settlements. Kazakhstan's President Tokayev proposed directing bank resources toward infrastructure, technological, and industrial projects, while Iran's Pezeshkian suggested a joint export and investment insurance mechanism.”
News18
