The Central Bank of the Russian Federation initiated steps to reduce the regulatory burden on local financial institutions, with the upcoming changes to mainly affect prudential requirements for banks.
The regulator said in its Oct. 14 filing that it plans to update the procedure for calculating the ratio for certain payment card transactions and to abolish the ratio that restricts banks' lending to their insiders. The watchdog will also remove the restriction on banking groups' participation in the equity of other legal entities — although this restriction will still apply to banks on a stand-alone basis.
The central bank also wants to reduce the amount and scope of reporting local lenders are mandated to publicly disclose or submit to the regulator. Some lenders will no longer have to submit statements regarding Basel III liquidity coverage ratios, while requirements regarding the public disclosure of information regarding maximum deposit interest rates will be modified by the regulator.
Additionally, the watchdog will look into simplifying the methodology for assessing banks' economic situation. For lenders undergoing resolution, there are plans to abolish the obligatory compilation and submission of capital recovery plans.
The planned measures will be published as draft amendments and put up by the regulator for public discussions.
The changes could result in the reduction of administrative costs which could be a boon for individual banks — especially those with a small business scale — but they are unlikely to significantly reduce the regulatory burden on banks, Kommersant said in its Oct. 15 report.