EBRD President Suma Chakrabarti speaks during the Annual Meeting and Business Forum of European Bank for Reconstruction and Development's (EBRD) in Nicosia, Cyprus May 10,2017. REUTERS/Yiannis Kourtoglou

NICOSIA (Reuters) - The European Bank for Reconstruction and Development on Wednesday rejected a Russian complaint about the bank’s investment freeze, prompting criticism from Moscow that the development bank was a ‘tool’ of Western foreign policy.

EBRD shareholders, who are dominated by Group of Seven governments, “overwhelmingly” rejected what the EBRD said was Russia’s claim that the ban on Russian investments brought in at the height of the Ukraine crisis in 2014, had breached EBRD rules.

EBRD President Suma Chakrabarti said the decision was “final and binding” and that there had been no discussion at the meeting about what it would require for it to restart investments in Russia.

Russia’s economy minister, Maxim Oreshkin, responded by saying the move had set an “extremely dangerous precedent”. “We saw the EBRD became a tool of foreign policy and not a fair and open institution,” he said.

The EBRD was set up in 1991 to help ex-Soviet economies make the transition to free market capitalism.

Russia was for a long time its biggest lending destination, but the near three-year freeze has shrunk its portfolio there to around 3.7 billion euros, although that is still roughly 10 percent of the bank’s overall portfolio.