On the Implementation of New Mechanism for Credit Institution Refinancing

In order to expand banks’ capabilities to provide long-term loans to finance investment projects and enhance their availability for the economy, the Bank of Russia took a decision to implement a new mechanism to refinance credit institutions.

The loans will be provided to the banks for up to and including three years at a rate of 6.5% p.a.

This refinancing mechanism allows the banks to use as a security the rights of claim on loans to finance investment projects selected in accordance with the procedure stipulated in the Russian Government Resolution No. 1016, dated 14 December 2010, ‘On the Approval of the Rules to Select Investment Projects and Principals for the Provision of the Russian Federation Government Guarantees for Loans or Bonded Loans Attracted to Carry out Investment Projects’.

At its initial stage, the new mechanism will be accessible to large banks whose equity capital exceeds 50 billion rubles.

An intersectoral working group involving participants from the banking community has been set up to further develop this mechanism.

The Bank of Russia left the interest rates on the experimental specialised refinancing instruments unchanged. The interest rate on loans of the OJSC ‘SME Bank’ secured with the pledge of receivables on interbank loans to finance small- and medium-sized businesses for up to one year will be kept at 4% p.a.

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