The Central Bank intends to expand the list of securities for investment by banks with a basic license

The Bank of Russia plans in the near future to expand the list of securities in which banks with a basic license can invest. This was announced by the head of the regulator Elvira Nabiullina during a meeting with representatives of credit institutions. The Central Bank also supports granting such banks the right to open correspondent accounts with foreign credit institutions on a permanent basis.

According to press release on the website of the Bank of Russia, the regulator also intends to:

• consider extending the incentive regulation program for technology sovereignty and economic adaptation projects to banks with a basic license;
• clarify the procedure for reserving contingent liabilities of a credit nature to reduce the burden on banks’ capital;
• continue to work with the Ministry of Finance on the transition to a credit rating as the main criterion for banks’ access to public funds and on ensuring competitive access to subsidized lending programs.

According to Elvira Nabiullina, small credit organizations, especially those operating in the regions, contribute to increasing the availability of banking services. “At the same time, it is no secret that such banks have their own specifics. We take this into account in regulation, including to ensure adequate opportunities for the growth and development of banks with a basic license. We are ready to further develop their regulation, taking into account changing economic circumstances,” she said.

In addition, the Bank of Russia invited credit institutions to explore options for creating “special banking associations.” According to the regulator, the partnership between banks can help develop their business models, reduce costs, increase business scale and customer base.

In July 2022, a law came into force that allows banks with a basic license to open correspondent accounts with foreign banks until December 31, 2023. In March, Elvira Nabiullina said that the regulator was considering lifting the restriction for banks with a basic license on a permanent basis. According to the regulator, 18 credit institutions with a basic license managed to open accounts in non-resident banks.

Milena Kostereva