Results of monitoring of maximum interest rates of credit institutions (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Results of monitoring of maximum interest rates of credit institutions
The July 2019 results of the monitoring of the maximum interest rates on deposits in Russian rubles of the top ten credit institutions1 attracting the largest amount of household deposits are as follows:
The first ten days of July — 7.14%;
Data on the dynamics of monitoring results are available in the Banking Sector / Credit Institutions Performance subsection of the Statistics section on the Bank of Russia website.
1 PJSC SBERBANK (1481) — www.sberbank.ru, PJSC SOVCOMBANK (963) — sovcombank.ru, VTB (PJSC) (1000) — www.vtb.ru, JSC RAIFFEISENBANK (3292) — www.raiffeisen.ru, GPB BANK (JSC) (354) — www.gazprombank.ru, PJSC CREDIT BANK OF MOSCOW (1978) — mkb.ru, JSC ALFA-BANK (1326) — alfabank.ru, PJSC BANK FC OTKRITIE (2209) — www.open.ru, PJSC PROMSVYAZBANK (3251) — www.psbank.ru, JSC ROSSELKHOZBANK (3349) — www.rshb.ru. The monitoring was conducted by the Bank of Russia Banking Supervision Support Department using the information provided by the said websites. The published value is indicative.

12 July 2019
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Recapitalisation of JSC VOCBANK (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Recapitalisation of JSC VOCBANK
The Bank of Russia approved the plan of its participation in bankruptcy prevention measures for Joint-stock Company Volga-Oka Commercial Bank (Reg. No. 312, hereinafter, VOCBANK). These amendments provide for the Bank of Russia to allocate 2.73 billion rubles for recapitalisation purposes. As a result, the Bank of Russia will become the owner of more than 99.9% of VOCBANK’s ordinary shares.
Following the Bank of Russia’s purchase of VOCBANK’s follow-on offering the latter will become compliant with capital adequacy ratios and capital buffers.
Measures already implemented under the Bank of Russia’s participation plan ensured the normal operation of VOCBANK.
The Bank of Russia is exploring the possibility of selling VOCBANK’s shares to interested investors in line with the duly established procedure.

12 July 2019
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Recapitalisation of PJSC Moscow Industrial Bank (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Recapitalisation of PJSC Moscow Industrial Bank
The Bank of Russia approved amendments to the plan of its participation in bankruptcy prevention measures for Public Joint-stock Company Moscow Industrial Bank (Reg. No. 912, hereinafter, MInBank).
These amendments provide for the Bank of Russia to allocate 128.7 billion rubles for recapitalisation purposes. These funds are earmarked for purchasing MInBank’s follow-on offering, as a result of which the Bank of Russia will become the owner of more than 99.9% of MInBank’s ordinary shares.
Following the Bank of Russia’s purchase of MInBank’s follow-on offering the latter will become compliant with capital adequacy ratios and capital buffers.
Measures already implemented under the Bank of Russia’s participation plan helped cease the outflow of the customers’ funds and ensure the normal operation of MInBank.

12 July 2019
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Common equity adequacy ratio of PJSC CB Vostochny declined (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Common equity adequacy ratio of PJSC CB Vostochny declined
Pursuant to the requirements of Clause 2.3.4 of Bank of Russia Regulation No. 646-P, dated 4 July 2018, ‘On the Methodology for Measuring Equity Capital of Credit Institutions (Basel III)’, the Bank of Russia informs that according to the financial statements of the credit institution PJSC CB Vostochny (Registration No. 1460), its common equity adequacy ratio (N1.1) was below the level specified in Clause 2.3.4 of the Regulation on an aggregate basis for six and more business days within 30 consecutive business days during the period from 31 May 2019 to 5 June 2019.

12 July 2019
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Banking licence of NBMC cancelled (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Banking licence of NBMC cancelled
By its Order No. OD-1627, dated 12 July 2019, the Bank of Russia cancelled the banking licence of the Moscow-based Joint-stock Commercial Bank National Bank of Mutual Credit (joint-stock company) or NBMC (Reg. No. 3214). The credit institution ranked 411th by assets in the Russian banking system.1
The licence of NBMC was cancelled2 following the request that the credit institution submitted to the Bank of Russia after the decision of the general shareholders’ meeting on its voluntary liquidation (in accordance with Article 61 of the Civil Code of the Russian Federation).
Based on the reporting data provided to the Bank of Russia, the credit institution has enough assets to satisfy creditors’ claims.
A liquidation commission will be appointed to NBMC.3
NBMC is not a member of the deposit insurance system.
1 According to the financial statements as of 1 July 2019.
2 The licence was cancelled in accordance with Article 23 of the Federal Law ‘On Banks and Banking Activities’.
3 In accordance with Article 62 of the Civil Code of the Russian Federation and Article 21 of the Federal Law ‘On Joint-stock Companies’.

12 July 2019
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Banking licence of NBCO PCC revoked and provisional administration appointed (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Banking licence of NBCO PCC revoked and provisional administration appointed
By its Order No. OD-1624, dated 12 July 2019, the Bank of Russia revoked the banking licence from the Moscow-based Joint-stock Company Non-banking Credit Organization Private Cash Center or JSC NBCO PCC (Reg. No. 3420-K, further referred to as NBCO PCC). The credit institution ranked 464th by assets in the Russian banking system.1
The Bank of Russia took this decision in accordance with Clause 6, Part 1 and Clause 12, Part 2, Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that NBCO PCC:
failed to increase capital to the minimum value established by the Federal Law ‘On Banks and Banking Activities’;
violated federal banking laws and Bank of Russia regulations, making the regulator repeatedly apply supervisory measures over the last 12 months.
The management and owners of NBCO PCC failed to take effective measures to increase its capital to the minimum value of 90 million rubles as established by Article 11.2 of the Federal Law ‘On Banks and Banking Activities’ from 1 July 2019.
The Bank of Russia appointed a provisional administration3 to NBCO PCC for the period until the appointment of a receiver4 or a liquidator.5 In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
NBCO PCC is not a member of the deposit insurance system.
1 According to the financial statements as of 1 July 2019.
2 The Bank of Russia took this decision in connection with the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated application of measures, within a year, stipulated by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’, and the failure to comply with Parts 15 and 16, Article 11.2 of the Federal Law ‘On Banks and Banking Activities’, taking into account the fact that the non-bank credit institution failed to achieve the minimum capital as of 1 July 2019.
3 In accordance with Bank of Russia Order No. OD-1625, dated 12 July 2019.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.

12 July 2019
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Banking licence of NKO 21 VEK revoked and provisional administration appointed (12.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Banking licence of NKO 21 VEK revoked and provisional administration appointed
By its Order No. OD-1622, dated 12 July 2019, the Bank of Russia revoked the banking licence of the Saint Petersburg-based Non-bank Credit Institution 21 VEK (limited liability company) or NKO 21 VEK Ltd (Reg. No. 3309-K, further referred to as NKO 21 VEK). The credit institution ranked 463rd by assets in the Russian banking system.1
The Bank of Russia took this decision in accordance with Clause 12, Part 2, Article 20 of the Federal Law ‘On Banks and Banking Activities’,2 based on the facts that NKO 21 VEK:
failed to increase capital to the minimum value established by the Federal Law ‘On Banks and Banking Activities’.
NKO 21 VEK have long experienced a business downturn. The management and owners of NKO 21 VEK failed to take effective measures to increase its capital to the minimum value of 90 million rubles as established by Article 11.2 of the Federal Law ‘On Banks and Banking Activities’ from 1 July 2019.
The Bank of Russia appointed a provisional administration3 to NKO 21 VEK for the period until the appointment of a receiver4 or a liquidator.5 In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
NKO 21 VEK is not a member of the deposit insurance system.
1 According to the financial statements as of 1 July 2019.
2 The Bank of Russia took this decision in connection with the credit institution’s failure to comply with Parts 15 and 16, Article 11.2 of the Federal Law ‘On Banks and Banking Activities’, taking into account the fact that the non-bank credit institution failed to achieve the minimum capital as of 1 July 2019.
3 In accordance with Bank of Russia Order No. OD-1623, dated 12 July 2019.
4 In accordance with Articles 127 and 189.68 of the Federal Law ‘On Insolvency (Bankruptcy)’.
5 In accordance with Article 23.1 of the Federal Law ‘On Banks and Banking Activities’.

12 July 2019
The reference to the Press Service is mandatory if you intend to use this material.

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Bank of Russia Bulletin released (09.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Bank of Russia Bulletin released
Bank of Russia Bulletin No. 44 (2096) of 9 July 2019 has been released.
The issue publishes a speech delivered by the Bank of Russia Governor Elvira Nabiullina at the 28th International Financial Congress.
Also published is information on the National Financial Board meeting and new approaches to credit risk assessment introduced in the Russian regulatory framework.
The Credit Institutions section lists credit institutions complying with the requirements of resolutions of the Russian Federation Government as of 1 June 2019.
The issue publishes Bank of Russia Order No. OD-1571, dated 05.07.2019, on amending the Appendix to Bank of Russia Order No. OD-475, dated 7 March 2019.
The Non-bank Financial Institutions section contains the following Bank of Russia orders:
No. OD-1545, dated 02.07.2019, on amending the Appendix to Bank of Russia Order No. OD-521, dated 14 March 2019;
No. OD-1546, dated 02.07.2019, on amending the Appendix to Bank of Russia Order No. OD-1091, dated 14 May 2019;
No. OD-1547, dated 02.07.2019, on amending the Appendix to Bank of Russia Order No. OD-1089, dated 14 May 2019;
No. OD-1548, dated 02.07.2019, on the revocation of insurance licences from Limited Liability Company Strakhovye Investitsii.
The issue presents consolidated data on financial market sectors and information notices by the Bank of Russia.
The Official Documents section publishes the following materials:
Bank of Russia Regulation No. 681-P, dated 30 March 2019, ‘On the Procedure for the Bank of Russia to Supervise the Activities of the Association of Insurers, Including the Creation of Compensation Fund and Compensation Payments, and on the Forms and Timeframes for the Association of Insurers to Submit to the Bank of Russia Data Specified in Clause 2 of Part 4 of Article 9 of Federal Law No. 260-FZ, Dated 25 July 2011, ‘On State Support for Agricultural Insurance and Amending the Federal Law ‘On Agricultural Sector Development’ (becomes effective 10 days after the official publication; posted on the Bank of Russia website on 01.07.2019);
Bank of Russia Ordinance No. 5091-U, dated 10 March 2019, ‘On Amending Bank of Russia Regulation No. 483-P, Dated 6 August 2015, ‘On the Procedure for Assessing IRB Credit Risk’ (becomes effective 10 days after its official publication except for the provisions for which other effective periods are established; posted on the Bank of Russia website on 04.07.2019);
Bank of Russia Information Letter No. IN-04-45/52, dated 26 June 2019, ‘On Invalidating Certain Bank of Russia Letters’;
Bank of Russia Information Letter No. IN-014-12/54, dated 28 June 2019, ‘On the Extension of Sanctions of the UN Security Council Against South Sudan’;
Bank of Russia Information Letter No. IN-06-28/55, dated 2 July 2019, ‘On the Document Containing Net Asset Value Calculation Submitted for the State Registration of Issues (Additional Issues) of Securities or Reports on the Results of Issues (Additional Issues) of Securities’.

09 July 2019
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Introducing new approaches to credit risk in Russian regulatory framework (03.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Introducing new approaches to credit risk in Russian regulatory framework
Starting from 2019, in the context of developing the regulatory framework encouraging the credit support for the economy, the Bank of Russia has been revising step-by-step the procedure for calculating the capital adequacy ratios of banks and implementing a new standardised approach to credit risk assessment.1
During the first phase, revisions have been implemented in assessing credit risk for sovereign borrowers based on external long-term creditworthiness ratings. These revisions came into force in June 2019. This makes it possible to reduce the ratios for sovereign borrowers and export guarantee loans from 100% to 50%, i.e. down twice.
In 2019 3Q, a draft new version of Instruction No. 180-I is expected to be published (the anticipated effective date being 1 January 2020), which provides for a differentiated approach to credit risk assessment as part of the requirements for banks and corporate borrowers, depending on the creditworthiness of the borrower and its operating indicators.
As for the requirements for corporate borrowers, the regulator is planning to separate an ’investment grade’ category with a lower risk coefficient of 65% (being presently assessed using the risk coefficient of 100%), provided that the following criteria are satisfied at the same time: they are classed under quality category I or II according to Bank of Russia Regulations No. 590-P, dated 28 June 2017, and No. 611-P, dated 23 October 2017, and the securities of the borrower have been listed on an organised stock market.
The regulator is also planning to set a lower risk coefficient of 85% for the requirements for small and medium businesses, which are assessed on a case-by-case basis (the risk coefficient of 100% is presently used), provided that the requirements for the said borrowers are classified under quality category I or II according to Bank of Russia Regulation No. 590-P and Bank of Russia Regulation No. 611-P, and they have no overdue payments. As for the requirements for small and medium businesses which are assessed on a portfolio basis and which satisfy the criteria established by the current Instruction No. 180-I, the lower risk coefficient of 75% continues to apply.
As for the requirements for banks, an approach will be used according to which the risk coefficients will be set depending on whether the bank is classified as an A (A*), B or C-class defined in the BCBS document1 based on the level of its creditworthiness, and on whether it complies with the required ratios and minimum capital conservation buffers established in its country of incorporation.
As for short-term requirements for A- and B-class banks (irrespective of the currency of denomination), the risk coefficients of 20% and 50%, respectively, will be used; and for other requirements for А (А*)-class banks the risk coefficient of 40% (30%), and for В-class banks — 75% will be used. The requirements for C-class banks (which do not comply with the required ratios) will be weighted using the risk coefficient of 150%.
The requirements for international development banks (which are not included in the list of the international financial organisations for which, according to the BCBS1 document the 0% risk coefficient is to be used) will be weighted using the 50% risk coefficient.
At the same time, the regulator will adjust the approaches to credit risk by setting a higher risk coefficient of 400% for investments in speculative unlisted equities of legal entities and by applying a higher risk coefficient of 150% for uncovered overdue loans (provided that the provision of at least 20% has been formed for them), as well as for risk-free contingent commitments with the credit conversion factor being set to 0.1 (instead of 0).
It is expected that, due to the reduction in the total amount of the risk-weighted assets, these approaches will make it possible to free up banks’ capital and to create additional opportunities to finance the real economy. That being said, the total amount of the assets and contingent commitments for which the risk coefficients have been raised, given that a transition period for banks and certain exemptions have been provided for, will not considerably affect the indicators of the banking system.
At the next phase of the implementation of the new standardised approach to credit risk (in 2020, with 1 January 2021 being the effective date), the regulator is planning to revise the approaches to assess mortgage and consumer loans with an expected positive effect on banks’ capital adequacy ratios.
The full versions of the BCBS1 materials in English are available on the official website of the Bank for International Settlements.
______________
1 The Basel Committee on Banking Supervision document ’Basel III: Finalising post-crisis reforms’ (December 2017).

03 July 2019
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MIL OSI

Bank of Russia Bulletin released (03.07.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Bank of Russia Bulletin released
Bank of Russia Bulletin No. 43 (2095) of 3 July 2019 has been released.
The issue publishes information on the decision of the Bank of Russia Board of Directors to set add-ons to risk weights on unsecured consumer loans in rubles extended from 1 October 2019 depending on the borrower’s debt service to income ratio and the effective interest rate.
The Credit Institutions section publishes the list of credit institutions complying with the requirements of Federal Law No. 213-FZ, dated 21 July 2014, Federal Law No. 161-FZ, dated 14 November 2002, and Russian Federation Government Resolution No.706, dated 20 June 2018, as of 1 June 2019.
The issue also lists credit institutions which comply with the requirements of Russian Federation Government Resolutions No. 1121, dated 24 December 2011, and No. 1232, dated 7 October 2017, as of 1 June 2019.
The Bulletin presents consolidated statistics on the top 30 Russian banks as of 1 June 2019.
The Bulletin publishes the following Bank of Russia orders:
No. OD-1451, dated 25.06.2019, on amending Appendix 1 to Bank of Russia Order No. OD-2853, dated 31 October 2018;
No. OD-1453, dated 25.06.2019, on amending the Appendix to Bank of Russia Order No. OD-475, dated 7 March 2019;
No. OD-1531, dated 01.07.2019, on the termination of activities of the provisional administration to manage the Moscow-based credit institution ASPECT-BANK;
No. OD-1532, dated 01.07.2019, on amending the Appendix to Bank of Russia Order No. OD-1225, dated 31 May 2019;
No. OD-1534, dated 01.07.2019, on amending the Appendix to Bank of Russia Order No. OD-1225, dated 31 May 2019;
No. OD-1542, dated 02.07.2019, on the termination of activities of the provisional administration to manage the Moscow-based credit institution CB International Settlement Bank LLC.
The Non-bank Financial Institutions section contains the following Bank of Russia orders:
No. OD-1463, dated 27.06.2019, on amending the Appendix to Bank of Russia Order No. OD-1091, dated 14 May 2019;
No. OD-1467, dated 27.06.2019, on amending the Appendix to Bank of Russia Order No. OD-523, dated 14 March 2019;
No. OD-1468, dated 27.06.2019, on amending the Appendix to Bank of Russia Order No. OD-1091, dated 14 May 2019;
No. OD-1470, dated 27.06.2019, on amending the Appendix to Bank of Russia Order No. OD-688, dated 28 March 2019;
No. OD-1488, dated 28.06.2019, on amending the Appendix to Bank of Russia Order No. OD-1091, dated 14 May 2019.
The Bulletin publishes information on the termination of the forced liquidation procedure against JSC NFP Mosenergo OPS.
The issue presents consolidated data on financial market sectors and information notices by the Bank of Russia.
The Official Documents section publishes the following materials:
Bank of Russia Ordinance No. 5102-U, dated 26 March 2019, ‘On Cases for Commodity Delivery Operators to Open Trading Commodity Accounts and Clearing Commodity Accounts if the Accounting of Assets Used to Fulfil Obligations Accepted for Clearing is Based on Grounds Other than the Agreement for Storage of These Assets’ (becomes effective 10 days after its official publication; posted on the Bank of Russia website on 27.06.2019);
Bank of Russia Ordinance No. 5147-U, dated 22 May 2019, ‘On Amending Bank of Russia Regulation No. 448-P, Dated 22 December 2014, ‘On Credit Institutions’ Accounting of Fixed Assets, Intangible Assets, Real Estate Temporarily Unused in Operational Activity, Long-Term Assets Held for Sale, Inventories, Means and Objects of Labour of Undetermined Purpose Obtained under Compensation or Pledge Agreements’ (becomes effective on 1 January 2020; posted on the Bank of Russia website on 20.06.2019);
Bank of Russia Ordinance No. 5148-U, dated 22 May 2019, ‘On Amending Bank of Russia Regulation No. 492-P, Dated 22 September 2015, ‘Sectoral Standard for Accounting Fixed Assets, Intangible Assets, Investment Assets, Long-term Assets Held for Sale, Inventories, Means and Objects of Labour of Undetermined Purpose Obtained under Compensation or Pledge Agreements, and Assets and (or) Estimated Balances Thereof Obtained Following Insurer’s (Beneficiary’s) Waiver of the Ownership of Insured Assets, in Non-bank Financial Institutions’ (becomes effective 10 days after its official publication; posted on the Bank of Russia website on 21.06.2019);
Bank of Russia Ordinance No. 5149-U, dated 22 May 2019, ‘On Amending Bank of Russia Regulation No. 612-P, Dated 25 October 2017, ‘On the Procedure for Non-bank Financial Institutions to Record Accounting Items’ (becomes effective on 1 January 2020; posted on the Bank of Russia website on 21.06.2019);
Bank of Russia Information Letter No. IN-06-59/50, dated 17 June 2019, ‘On Legal Consequences of the Foreclosure of Mortgaged Property Owned by a Person’;
Bank of Russia Methodological Recommendations No. 19-MR, dated 26 June 2019, ‘On Recording Operations as per Reporting Form 0409401 ‘Authorised Bank’s Report on Overseas Operations’.

03 July 2019
The reference to the Press Service is mandatory if you intend to use this material.

MIL OSI