On parameters of irrevocable credit line

The Bank of Russia Board of Directors decided to keep the fee for the right to use the irrevocable credit line¹ (ICL) at 0.15% of the maximum ICL limit, and to maintain the key rate premium used to determine the interest rate on loans issued under the ICL at 1.75 pp.

In compliance with the standards of the Basel Committee on Banking Supervision², the Bank of Russia establishes the fee for the right to use the ICL at the level that prevents the distorting effect of this fee on credit institutions’ incentives to manage liquidity risk. The assessment of the fee for the right to use the ICL takes into account the difference between the return on high-quality liquid assets and that on less liquid assets of comparable credit quality in order to prevent an overuse of BoR ICL to comply with the liquidity coverage ratio. In accordance with the above criterion, the Bank of Russia monitors the fee adequacy and will adjust it, if needed.

Should the Bank of Russia Board of Directors decide to revise the BoR key rate, the interest rate on loans issued before that under the ICL shall be adjusted by the variation in the BoR key rate starting the revision date.

For information refer to Interest rates on the Bank of Russia credits provided under the irrevocable credit lines.

¹ The ICL shall be provided to Russian credit institutions in compliance with Bank of Russia Order No. OD-3381, dated 30 November 2015, ‘On Issuing Bank of Russia Loans under Agreements on Opening an Irrevocable Credit Line’.

² Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools (January 2013).

The reference to the Press Service is mandatory if you intend to use this material.

07.02.2017 00.00.00