Banks must inform customers about reasons behind refusal of service or transaction

The regulator has prepared methodological recommendations and is directing the attention of credit institutions towards the need to respect the rights of customers that were refused a transaction or the execution of an account or deposit agreement, or were subject to online banking restrictions.

These recommendations were developed based on the analysis of appeals to the interdepartmental commission established by the Bank of Russia pursuant to the anti-money laundering law in order to review issues regarding the legality of banks’ execution of their authorities to refuse service to customers.

The Bank of Russia reminds banks that customers need to receive sufficient information regarding anti-money laundering measures applied to them so that they can use such information to rehabilitate themselves. Meanwhile, the interdepartmental commission has observed from experience, that banks often make a decision to refuse service to a customer based exclusively on the fact that other credit institutions took similar measures before them, which is a violation of the regulatory principles governing the use of such information.

According to the recommendations, when the Bank of Russia conducts its supervisory activity, it reviews the procedures followed by a credit institution when making a decision to refuse service to a customer and the process of informing them about the reasons therefor.