Bank of Russia stipulates enforcement action against credit cooperatives failing to comply with sectoral rules and statutory regulations

The draft Bank of Russia Ordinance stipulates situations in which self-regulatory organisations (SROs) are obliged to warn credit consumer cooperatives and agricultural credit consumer cooperatives, require that they take corrective action or impose fines on them.

In cases where a detected violation has been rectified or is impossible to rectify, SROs may issue non-compliant cooperatives a warning. Fines shall be imposed in cases where the non-compliant organisation fails to take appropriate corrective action within the stipulated timeframe. The SRO’s decision to impose a fine shall include details of the amount, the date of payment and the grounds for this amount, which can range between 10 thousand and 100 thousand rubles.

This warning shall not entail a ban or a restriction on the non-compliant cooperative's operations. If the Bank of Russia has already issued an improvement notice, no enforcement action shall be undertaken by a SRO against the non-compliant organisation.

The corrective action deadline for execution of the improvement notice shall be determined by the nature of the violation and the necessary corrective action as specified in the improvement notice.

By law, SROs associating cooperatives shall be obliged to take enforcement action in cases of cooperatives’ failure to comply with sectoral rules. The Bank of Russia, for its part, is responsible for oversight over SRO supervisory functions.

Under the draft regulations, SROs will have 90 days to align their in-house regulations to the Bank of Russia Ordinance requirements.