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Ukraine’s parliament has approved a decree of President Volodymyr Zelensky to seize local assets of Russian banks, Interfax has reported. 

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The decree allows the seizure of Sberbank’s 100% stake in International Reserve Bank (IR Bank) and the Russian state development bank VEB’s 99.8% stake in Prominvestbank (PIB). 

Ukrainian authorities have also called for the seizure of financial assets in the form of VEB’s rights to PIB debt worth UAH0.93bn ($31.6m) and Sberbank’s rights to IR Bank’s debt valued at around UAH14.9bn ($504.4m).

Additionally, other financial assets of the Russian bank’s subsidiaries are also being seized. 

An exception has been made with regards to IR Bank’s assets worth UAH3bn ($101.5m), which will be used to pay back the creditors. 

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According to the National Security and Defense Council’s decision, authorities are required to ensure that these assets are seized within ten days of the decree’s publication.

Responding to the development, Sberbank said that it will challenge the seizure of assets by Ukraine.

“Sberbank is initiating investment arbitration against Ukraine,” the lender said citing the agreement on mutual protection of investments dated 27 November 1998. 

VEB took a similar stand and said issues related to asset seizures and compensation of losses will be resolved in international arbitration. 

The development bank said the Stockholm tribunal recognised it as “an independent investor, and not a government body or part of the state.”

The news comes as the Japanese authorities froze the assets of nine Russian banks including Sberbank and VEB along with their subsidiaries.