Bank of Russia develops methodology for calculating concentration of immobilised assets
The regulator will limit risks of banks’ investments in immobilised assets (IAs), i.e. non-core, illiquid assets, which offer no repayment guarantee and involve equity risks. These assets include investments in property, excess fixed assets, and ecosystems, among other things.
To this end, the regulator will introduce a concentration indicator for immobilised assets – the risk-sensitive limit (RSL). Immobilised assets exceeding the RSL should be covered with a bank’s equity. As a result, the risks of excess investments in these assets will be shifted from depositors and creditors to the bank’s shareholders.
The Bank of Russia has prepared a draft regulation defining the methodology for calculating the RSL. According to the draft, banks will classify IAs into one of the three groups with the immobilisation ratio ranging from 1 to 3, depending on the risk level of an asset (its type, liquidity, and period on the balance sheet).
The maximum value of the RSL is 25% of a bank’s equity. The draft also introduces a five-year (from 2027 to 2031) phased schedule for achieving the RSL target level (100–85–70–50–25%).
More information about the RSL is available in the Bank of Russia’s report published in May 2025.