Banking Regulation Review: 2024 Q3 results and future plans
In 2024 Q3, the Bank of Russia presented to the market a report on discussion outcomes regarding the concept of a new liquidity coverage ratio and a draft regulation. Based on the peculiarities of the Russian financial market, the new ratio is planned to become mandatory for all systemically important banks from January 2026.
The regulator has expanded conditions governing the application of incentive-based regulation to the projects of technological sovereignty and the structural adaptation of the economy. This will help banks increase financing for top-priority projects.
The regulator has adopted a mortgage standard which is intended to counter unfair bank practices in this segment and become mandatory for all credit institutions from 1 January 2025.
The regulator has cancelled the limit on the total cost of credit (TCC) in the mortgage segment until the end of 2025 Q1. This will allow banks to adjust rates without violating the statutory TCC limit.
By the end of the year, the regulator plans to present to the market the concept of a revised methodology for identifying systemically important banks by their impact on the economy which will help determine them more accurately. This year, the Bank of Russia will also publish a report on the outcomes of the discussions with the market of the concentration risks policy, which will outline further steps in this area. Moreover, the regulator will offer market participants to discuss finalised approaches to assessing credit risk based on banks’ proposals, including in terms of provisioning for retail loans and factoring, as well as a new model for assessing developers that use escrow accounts.
The regulator will continue to prepare changes to the calculation of the capital adequacy ratio, including the adoption of the finalised approach to the calculation of ratios by all banks with a universal licence.
More details are available in the Banking Regulation Review for 2024 Q3.