Russians decided to abolish commission for paying utility bills: banks are against

Credit institutions may lose billions of rubles

As State Duma Chairman Vyacheslav Volodin recently announced, by the end of the year the bill on abolishing the commission for paying for housing and communal services (HCS) will be considered as a priority by the lower house of parliament. It received government support and was approved in the first reading back in 2020. However, banks again spoke out against the adoption of this regulatory act, as follows from the statement of the National Council for the Financial Market (NCFM). At the same time, they proposed collecting commissions for paying for housing and communal services from resource-supplying organizations instead of citizens. MK found out from experts what the adoption of this initiative could lead to.

It is necessary to consider the bill on the abolition of fees for paying for housing and communal services as a priority in December in order for it to start working already in 2024, stressed State Duma Speaker Volodin. Three years ago, President Putin supported this idea, calling such commissions a “quasi-burden” on consumers. The law was then considered for four months, but in May 2020, work with the document had to be stopped due to protests from representatives of the banking sector. They warned of the risks that consumers might face if it were implemented. In May 2020, the State Duma Committee on Housing Policy and Housing and Communal Services developed a table of amendments to the second reading of the bill. He insisted on establishing a ban on charging fees only to pensioners and citizens who receive subsidies to pay for housing and communal services, after which parliamentarians did not return to discuss the document for three years. And this year the deputies wanted to complete the implementation of the bill.

“This bill is still a good initiative that demonstrates the state’s concern for its citizens, especially those who need additional social protection,” notes Associate Professor of the Department of Global Financial Markets and Fintech of the Russian Economic University. Plekhanova Tatyana Belyanchikova. The appearance of such a document has two goals: to try to receive compensation for lost income from the state or to leave everything as is, so as not to incur additional costs for restructuring business processes, the scientist emphasized.

At the same time, the NSFR supported the abolition of utility fees for pensioners and benefit recipients. According to experts, a more rational solution would be to assign the obligation to pay for this type of service to the resource supplying organizations in whose favor the payment is made. But they prefer to remain silent; as a result, the discussion revolves only around the interests of citizens and banks. As credit broker Sergei Ostrovsky noted, every year housing and utility tariffs are indexed, and utilities become more expensive. Banks, thanks to the commission, which averages 1-2%, earn good money, and in order not to lose income, they will shift payments to their other services and their cost will rise in price. For example, the commission for servicing an account, paying for a home telephone, the Internet will increase, and payments for electricity may increase.

“Banks have their own arguments regarding maintaining commissions for payments for housing and communal services, due to the fact that otherwise, banks will stop accepting payments for utility services from cards of third-party banks in order to save on costs,” believes Natalya Milchakova, leading analyst at Freedom Finance Global.

At the same time, the banking community points out that if the law is adopted, the blow may fall on those they want to protect – beneficiaries, disabled people and pensioners. The jobs of bank tellers are supported precisely by commissions paid by clients. If they are abolished, then maintaining branches with a large number of cash desks will become unprofitable for bankers, and they will simply begin to cut them. “Since banks are not interested in free customer service, they will save on tellers, which will cause customers to wait in queues,” says Maxim Osadchiy, head of the analytical department of BKF Bank. “In addition, the trend towards reducing the number of bank additional offices will intensify.” For example, in 2022, the number of additional bank offices in Russia decreased by 1.7 thousand units, to 24.2 thousand. As a result, “they wanted the best, but it will work out as always,” the banker believes.