Major European and Saudi banks have stopped dealing with Sudan, diplomatic and other sources say, adding to the sanctions-hit country’s isolation and further straining its indebted, cash-starved economy. While Khartoum blames increased "pressure" from a US trade embargo first imposed 17 years ago, a US official said there had been no change in policy from Washington. The move by the European banks appears to reflect an increasingly cautious attitude by financial institutions which do not want to risk being found in violation of US sanctions, a Western diplomat said. "I think this is something actually mushrooming," he said of the risk-aversion by the banks, a number of which have been slapped with large fines in the United States in recent years for breaches of US sanctions on Iran. Germany's Commerzbank was the latest to sever its Sudan connection, according to diplomats. The bank had no comment when reached by AFP. The European Union itself has no sanctions against Sudan, whose government seized power 25 years ago in an Islamist-backed coup. But European banks with US branches or business in the United States "are closing any Sudanese accounts and won't even process payments from Sudan", the diplomat said. This affects private and government transactions. A local banker, who asked not to be identified, said that starting this month Saudi banks too had stopped dealing with the African nation. This is economically far more significant for Sudan than the European move. "Most of the accounts or money going out of Sudan, it's completely frozen," the banker said. The banks' action further complicates Sudan's economic difficulties which have mounted since 2011 when South Sudan separated with the bulk of the united country's oil production. Hard currency is in short supply, the Sudanese pound has weakened and inflation has mounted, creating social tensions which exploded in deadly street protests last September.