Consumer credit cooperatives to calculate financial ratios under new rules
The changes in regulations effective from 1 October 2021 will help reduce regulatory burden of consumer credit cooperatives (CCCs) without detriment to financial stability control frameworks. The relevant Bank of Russia ordinance takes into account proposals by credit cooperation market players and the regulator’s supervision practice.
Small-sized CCCs, united by a social and professional principle, will need less effort to adhere to the financial ratio FN2 — an exposure limit per saver or a group of affiliated persons. Its calculation will exclude the value of loans provided by a non-profit entity of which members are CCC shareholders, or by an employer / professional association of which employees make up a CCC.
Further adjustments were made to the indicators used to calculate the financial ratio of funds for non-core operations (FN7) and that of liquidity (FN8), making the calculation technique more easily understood and potentially reducing regulatory burdens for 15% market players.
Furthermore, in an effort to enhance financial stability of major and socially important market participants, in calculating the financial ratios of an exposure limit per borrower or group of affiliated persons (FN2, FN3), regulatory ratio requirements for CCCs with assets over 500 million rubles are set equal to those for CCCs with over 3 thousand of shareholders.