Oct 2 (Reuters) - The Moscow Region Arbitration Court on

Wednesday froze funds of the U.S. Bank of New York Mellon

held by the Russian branch of Citibank as well as funds of

JP Morgan Chase held by its Russian affiliate of Morgan Chase

Bank amounting in total to about $372 million.

The court decision said the action was initiated by Russia's

deputy prosecutor "in defence of the interests of the Russian

Federation" in connection with the Ukrainian central bank's

withdrawal of the licence of MR bank with plans to wind up the

bank by 2025.

The prosecutor's office launched the action late last month

against Ukrainian regulators and the two U.S. banks - Bank of

New York Mellon ( BK ) and JP Morgan Chase Bank recognising the action

as "expropriation" of the property of MR bank - Ukrainian

subsidiary of Russia's largest bank, Sberbank. It said the

action infringed the state's lawful interests.

The prosecutor's office sought recognition of $121 million

placed by MR bank in an account of JP Morgan Chase as the

rightful property of Sberbank and $251 million placed in an

account of the Bank of New York Mellon ( BK ) - amounting to a total

sum of damages of $372 million.

According to court documents, the action resulted in

Sberbank being denied judicial control over its subsidiary and

the right to dispose of its income, meaning that the state "lost

the opportunity to securе its own income from the activity

abroad of MR bank."

Both Sberbank and JP Morgan declined to comment on the

court action.