Fines for violating sectoral law defined for microcredit companies

The Bank of Russia set the requirements for measures self-regulatory organisations (SROs) should apply against microcredit companies (MCCs) for violations of sectoral law. The respective measures are recorded in SROs’ internal standards and the requirements are set forth in the Bank of Russia Ordinance.

In particular, the document stipulates that the fine for a revealed violation should total 0.05% of the total retail and corporate outstanding microloans (principal) issued by an MCC as of the last day of the quarter preceding the quarter when the SRO revealed the violation.

The fine doubles if the breach is repeatedly revealed within a year or entails a violation of consumer rights.

In particular, if the MCC’s total debt exceeds 200 million rubles, the fine imposed by the SRO on the MCC should total 100 thousand rubles or 200 thousand rubles if the violation is revealed repeatedly.

That said, retaliatory measures neither ban nor constrain microfinance operations of MCCs. The main purpose of the document is to build a transparent system of requirements for retaliatory measures applied by SROs and to ensure their uniform application.

The new ordinance becomes effective ten days after the publication.