Regulator and bankers discuss development prospects of banks with basic licence

On 18 February, the Bank of Russia Governor, Elvira Nabiullina, held a meeting between a BoR working group and the Association of Banks “Russia” on issues regarding the activity and development of banks with a basic licence.

The meeting attendees discussed the expansion of  the access granted to banks with a basic licence to include funds placed in banks from state budgets of various levels and by state-owned companies; the possibility for such banks to offer loans to certain ‘non-core’ borrowers; the creation of cloud services aimed at process automation; cybersecurity and biometric data collection; the cooperation with rating agencies, banking supervision; and other issues.

As a result of the meeting, it was decided to consider amending the regulation so as to allow banks with a basic licence to extend loans to their ‘non-core’ borrowers that have a long history of working with the bank provided that their loans were classified as quality category I or II without the application of increased risk ratios.

The Bank of Russia supported the suggestion from banks that wholly state-owned companies as well as municipal and state unitary enterprises should be considered ‘core’ borrowers for banks with a basic licence if the scope of their activity conforms to that of small and medium-sized enterprises.

Moreover, the regulator (with the participation of the Association of Banks “Russia”) intends to submit  its suggestions to the Government on expanding the number of credit institutions, including banks with a basic licence, that have access to various state programmes.