The United States along with its key allies and partners decided to disconnect key sanctioned Russian banks from the SWIFT financial system and impose restrictive measures on Russia's central bank in the wake of its invasion of Ukraine.
It was also decided to launch a joint task force to hunt down assets of sanctioned Russian companies and oligarchs, according to a joint statement issued by the leaders of the US, the European Commission, France, Germany, Italy, the UK and Canada on Saturday.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the world's main banking messaging service which links around 11,000 banks and institutions in more than 200 countries, including India.
Based in Belgium, the system is considered central to the smooth functioning of global finances and Russia's exclusion from it would hit the country hard.
"We stand with the Ukrainian government and the Ukrainian people in their heroic efforts to resist Russia's invasion. Russia's war represents an assault on fundamental international rules and norms that have prevailed since the Second World War, which we are committed to defending.
"We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin," the allies said in the statement.
The US and its allies committed to "ensuring that selected Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally."
"Second, we commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions," they said.
Earlier, there was reluctance within the European Union over blocking Russia from SWIFT as it would impact oil and gas payments.
"Third, we commit to acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government. Specifically, we commit to taking measures to limit the sale of citizenship -- so-called golden passports -- that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems," the allies said.
Further, they agreed to launch this coming week "a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions."
"As a part of this effort, we are committed to employing sanctions and other financial and enforcement measures on additional Russian officials and elites close to the Russian government, as well as their families, and their enablers to identify and freeze the assets they hold in our jurisdictions.
"We will also engage other governments and work to detect and disrupt the movement of ill-gotten gains, and to deny these individuals the ability to hide their assets in jurisdictions across the world," the statement said.
"Finally, we will step up our coordination against disinformation and other forms of hybrid warfare," it said.
A senior administration official told reporters that Russia has become a global economic and financial pariah with over 30 countries representing well over half the world's economy announcing sanctions and export controls against it.
"Putin's government is getting kicked off the international financial system," the official said on condition of anonymity.
Russia's invasion of Ukraine has provoked condemnation from countries in the West and retaliatory sanctions.
The US had earlier announced tough sanctions targeting Russian banks, businesses and oligarchs and several countries have closed their airspace for Russian planes.