Raiffeisen Bank International (RBI) anticipates that European regulators will instruct them to significantly reduce their lending and transactions with Russia, according to statements made by the Austrian bank on Thursday. 

This announcement adds to the mounting pressure on the largest Western bank operating in Russia.

As per the latest proposals from the European Central Bank (ECB), RBI will be instructed to reduce loans to customers in Russia by as much as 65% compared with Q3 last year and lower international payments from Russia by 2026, the Austrian bank stated.

RBI anticipates that the decision, which they expect to come in the "near term," would deal a significant blow to the bank. Despite facing pressure from international regulators to sever its connections with Moscow, RBI has so far resisted such calls, Reuters news agency reports.

Since Russia invaded Ukraine, RBI is still an essential economic lifeline for the millions of Russians wishing to send Euros or Dollars overseas.

Discussions between the RBI and ECB are happening amidst ongoing scrutiny by regulators regarding the Austrian bank and its ties to Russia. This scrutiny began over a year ago when the US sanctions enforcer, OFAC initiated an investigation into the bank's Russian operations.

Up to now, prominent Austrian officials, perturbed by what they perceive as US pressure on a small, neutral nation, have staunchly defended the bank. Their support stems from the bank's affiliation with a powerful industrial group that plays a significant role in bolstering the economy.

According to sources familiar with the matter who spoke to Reuters, Austria exerted pressure on Ukraine to remove RBI from a Ukrainian blacklist. 

Furthermore, authorities in Russia conveyed to RBI their preference for the bank to remain in operation, given its role in facilitating international payments. 

RBI serves approximately 2,600 corporate customers, four million account holders, and employs 10,000 staff in Russia.