The Central Bank proposed to soften the punishment for banks for violating certain regulations

The head of the Central Bank (CB) of Russia, Elvira Nabiullina, announced her readiness to create an “orange zone” for banks, in which penalties for violating certain regulations will be eased. The Central Bank did not specify which specific standards this may affect. The head of the department of banking regulation and analytics of the Central Bank, Alexander Danilov, clarified that three critical capital adequacy standards – basic, main and own – will be observed.

“We believe that according to a number of standards we can introduce such an “orange zone.” Its meaning is that if there is a slight violation of the standards, it (the bank – Kommersant) will not have serious consequences – it will not be disconnected from state programs, from the DIA, and there will be a threat of license revocation,” Ms. Nabiullina said at the forum of the Association of Banks of Russia in Sochi (quote from RBC). She clarified that for violation of standards, credit institutions will pay higher contributions to the ACB system.

The Central Bank also announced its readiness to return to previously postponed innovations in regulating the banking sector. “The margin of safety (capital – Kommersant) needs to be replenished as soon as the right moment arises for this, and we see from the readiness of banks that this can already begin. We should also begin to accumulate buffers and remove the vulnerabilities that banks have,” said Elvira Nabiullina.

At the end of September, it became known that the Bank of Russia plans to clarify the criteria for classifying a credit organization as systemically important and introducing differentiated capital allowances. Kommersant’s interlocutors point out that this does not oblige the regulator to automatically classify the bank as systemically important.

More details in the text “Kommersant” “Clarification of systemically significant”.

Petr Buzlaev