The Russian finance ministry plans to soften new credit rating requirements for lenders issuing guarantees for state contracts, which were supposed to come into force next year, RBC reported March 21.

The new rules, put forward by the ministry in April 2018, will raise the minimum credit requirements for bank guarantee issuers by three notches to BB- starting from January 2020. However, the ministry has tightened the requirements gradually by one notch per year, arguing that lenders need time to adjust, RBC said, adding that the change will particularly benefit smaller banks.

Under existing requirements, Russian lenders issuing bank guaranties for state contracts need to have capital of at least 300 million Russian rubles and a rating of at least В-(RU) assigned by Russia's Analytical Credit Rating Agency or ruB- assigned by Expert RA. State-controlled lenders, including PAO Sberbank of Russia, VTB Bank PJSC and AO Gazprombank, hold a market share of around 60% in terms of the value of issued bank guarantees, and the share would increase to 80% if the previous, stricter version of the new rules were to be enforced, the report said.