Enhancing deposit insurance framework: discussion points

Extending the scope of insurance coverage is the key focus of the consultation paper ’Improving the compulsory insurance system for deposits in the banks of the Russian Federation’.

The report studies an option to increase the maximum amount paid to struggling individuals as well as extending insurance coverage to the funds of certain types of non-profit organisations and associations. The proposals outline socially sensitive scenarios revealed as part of supervisory activities and bank resolution processes.

The report raises the following questions: which legal entities should have their funds covered (global practices suggest that the vast majority of depositors are protected), and how should contributions to the compulsory insurance fund change in order to, on the one hand, sustain the current financial burden on banks, preventing negative implications for banking sector stability, and, on the other hand, to ensure the fund’s resilience in a scenario when payments have to be made to all the insured entities in case of an insured event.

The State Corporation Deposit Insurance Agency helped shape the concept of the report, which takes into account, among others, ideas from lawmakers, social institutions, and the business community.

The Bank of Russia looks forward to feedback on the discussion points of the report through 31 July 2019.