Financial Crime World

Russia Strengthens Banking System with New Laws

=====================================================

Boosting Public Trust and Stimulating Growth

Moscow, May 28, 2001 - In a bid to increase public trust in the banking system and stimulate growth in organized savings, Russia has passed several key laws aimed at reducing risks taken by banks and ensuring financial stability.

Compulsory Household Bank Deposit Insurance System

  • Federal Law No. 177-FZ introduces a compulsory household bank deposit insurance system.
  • The law requires all banks to participate in the system, which will provide compensation to depositors in the event of a bank’s failure to meet its obligations.
  • The Deposit Insurance Agency will be responsible for managing the deposit insurance fund and paying out compensation to affected depositors.

Extending Guarantees for Depositors

  • Federal Law No. 96-FZ extends guarantees similar to those enjoyed by depositors of participating banks to depositors of non-member banks, providing an additional layer of protection for savers.
  • This law ensures that all depositors, regardless of the bank they are with, have a level of protection in case of a bank’s failure.

Foreign Exchange Regulation and Control

  • Federal Law No. 173-FZ ensures the implementation of a single state foreign exchange policy and stability of the Russian currency and domestic foreign exchange market.
  • The law defines foreign exchange operations and separates the powers of the federal government and the Bank of Russia relating to the regulation of such operations.

Credit Histories

  • Federal Law No. 218-FZ creates a modern credit system by compiling, processing, storing, and disclosing information about borrowers’ payment discipline.
  • The law aims to reduce overall credit risk and enhance the efficiency of credit institutions.
  • The Bank of Russia will play a major role in implementing this law through its Central Catalogue of Credit Histories.

Conclusion

These new laws are expected to boost confidence in the banking system and promote economic growth by reducing risks and increasing transparency. With these measures in place, Russia aims to create a more stable and trustworthy financial environment for its citizens and businesses.