Small enterprises’ funds to be insured by retail banks participating in deposit insurance scheme

Amendments to Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’, effective from 1 January next year, will extend insurance coverage to small enterprises’ funds.

The law states that from 1 January 2019 small enterprises will be placed into the category of depositors, alongside legal entities and individual entrepreneurs, whose bank account (deposit) funds are insured through the deposit insurance scheme. The insurance indemnity paid out to the depositor shall comprise 100% of all depositor accounts (deposits) but not exceed a total of 1.4 million rubles per bank. Insurance payments are also conditional on the small enterprise having been registered in the single SME register on the date of the loss occurrence.

Insurance shall cover monetary funds in rubles and foreign currency deposited with Russian banks that are licensed as retail credit institutions and have joined the deposit insurance scheme. No insurance shall be provided to small enterprises’ funds deposited with banks that have joined the deposit insurance scheme but are unlicensed as retail lenders, or with banks that are non-members of the deposit insurance scheme.

The lists of banks that are members of the deposit insurance scheme, both licensed and unlicensed by the Bank of Russia to attract deposits and open / maintain individuals’ accounts, are published on the State Corporation Deposit Insurance Agency website.

Banks that are non-members of the deposit insurance scheme and non-bank credit institutions have the right to open and maintain bank accounts (deposit accounts) of individual entrepreneurs and small enterprises in accordance with their Bank of Russia-issued licences.

Banks that are members of the deposit insurance scheme, which after 1 January 2018 have transformed into non-bank credit institutions, shall no longer have the right to attract individuals’ deposits and open individuals’ accounts, and shall be excluded from the deposit insurance scheme. At the same time, in accordance with current licences, the above credit institutions have the right to open and maintain bank accounts (deposit accounts) of individual entrepreneurs and small enterprises whose monetary funds with the above credit institutions are not subject to insurance.

The Bank of Russia further advises that it has approved and submitted Bank of Russia Ordinance ‘On the Procedure for Compiling the Register of Bank Liabilities to Depositors’ to the RF Ministry of Justice for state registration with a view to securing timely insurance payouts to depositors (including small enterprises) if an insured event occurs.

¹ Federal Law No. 177-FZ ‘ Federal Law No. 177-FZ ‘On the Insurance of Household Deposits with Russian Banks’ was amended in accordance with Federal Law No. 322-FZ, dated 3 August 2018.