Bank of Russia tightens business reputation requirements for microcredit company executives and owners
Under the new requirements, a microcredit company must not be headed by an individual who had held executive positions within the final year of a financial company’s operations before its licence was revoked, over the last five years. Furthermore, individuals failing to comply with Bank of Russia business reputation requirements are prohibited from holding a more than 10% share in a microcredit company.
The measure is intended to deny access to the financial market to individuals whose actions may threaten customer interests; it will help prevent cases when business owners attempt to relaunch a microcredit company which has been struck off the register. The relevant BoR Ordinance takes effect on 21 September 2020.
At the same time, a Bank of Russia procedure is in place whereby decisions related to business reputation may be appealed. Should an applicant for an executive post or an individual holding a share in a microcredit business present evidence that they were not involved in decisions or actions resulting in the revocation of a financial organisation's licence or in a decision to strike it off the register, the relevant Bank of Russia commission may uphold this appeal.