MOSCOW, July 20 (Reuters) - Sberbank, Russia's largest lender under Western sanctions, said on Wednesday it had started converting its depository receipts into ordinary shares.

A compulsory conversion mechanism will be introduced at the request of holders of depository receipts held outside Russia. These holders must apply to the Russian depository of J.P. Morgan Bank International LLC by Oct. 12, Sberbank said.

Sberbank's depository receipts, the rights to which are provided by Russian depositaries, will be converted upon the application of the issuer of the shares as determined by the central bank. (Reporting by Reuters; Editing by Edmund Blair)