Britain has imposed sanctions on Russian billionaires including Gennady Timchenko who have close links with Vladimir Putin.
The move comes after Russian President Vladimir Putin ordered troops to deploy in the two breakaway regions of eastern Ukraine following their claims of independence.
Saying Russia was heading towards a “pariah status” Johnson said, the world must now brace for the next stage of Putin’s plan.
The Kremlin was laying the ground for a full-scale invasion of Ukraine, said Johnson.
In a statement to parliament, he said five banks including Rossiya, IS Bank, GenBank, Promsvyazbank and the Black Sea Bank were being sanctioned, along with three people, Timchenko, Igor and Boris Rotenberg.
Interstingly, Johnson did not target Russia’s biggest state banks.
“It is absolutely vital that we hold in reserve further powerful sanctions…in view of what President Putin may do next,” said Johnson in response to calls for tougher action.
Of the five targeted banks only Promsvyazbank is on the Russian central bank’s list of systemically important credit institutions.
With the news reaching the market, shares of Russia’s two largest lenders, Sberbank and VTB reversed early losses to trade higher.
According to the British government, Timchenko was a major shareholder in Bank Rossiya, which played a role in the destabilisation of Ukraine after Russia’s 2014 annexation of Crimea.
“Bank Rossiya has supported the consolidation of Crimea into the Russian Federation by integrating the financial system following the annexation of Crimea,” said a statement listing the sanctions.
Hundreds of billions of dollars have flowed into London and Britain’s overseas territories from Russia since the fall of the Soviet Union in 1991, and London has become the Western city of choice for the super-wealthy of Russia and other former Soviet republics.
“We want to stop Russian companies from being able to raise funds in sterling or indeed in dollars,” said Johnson.
“The risk is that today’s slap on the wrist will not deter anything,” said Liam Byrne, a lawmaker from the Labour Party. “The prime minister’s got to recognise that pulling our punches does not work with President Putin.”
According to a Western official, who spoke on the condition of anonymity, Britain would also limit Russian access to sovereign debt markets and its ability to clear transactions.
Former Conservative Party leader Iain Duncan Smith asked Johnson to impose further sanctions saying China would be watching the West’s response carefully.
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