Limit parameters for immobilised assets revised
The Bank of Russia plans to reduce the risks of banks’ investments in non-core assets which have no requirements for repayment, are only liquid to a limited extent, and involve equity risks (immobilised assets). These are investments in equity instruments, tangible assets, excess fixed assets, ecosystems, etc.
To this end, the regulator will introduce a risk-sensitive limit (RSL): it will set the level of a bank’s capital required to cover immobilised assets exceeding the RSL. This will shift the risks inherent in excess investments in such assets from depositors and creditors to bank shareholders.
The new regulation will be applicable to banks with a universal licence and is to come into force from 2026.
The Bank of Russia has updated the RSL calculation method, first published in 2021, taking into account the results of banks’ surveys and the estimated effect of the RSL introduction on the sector. In particular, the regulator has revised and expanded the list of assets subject to the RSL, reduced the maximum immobilisation ratio, and loosened the schedule for reaching the target level of the RSL. The updated parameters of the RSL are described in the Bank of Russia’s paper.
The Bank of Russia welcomes feedback on the consultation paper through 27 June 2025.