Russian Legislation Update: May 2017

by White & Case LLP

White & Case LLP

Welcome to the most recent issue of our Russian Legislation Update, covering the period of May 2017.

In this issue…


On 1 May 2017 the President signed Federal Law No. 92-FZ amending the Law on Banks and a number of other laws.

According to this law introducing the amendments, which is also known as the law on proportionate banking regulation or the law on multi-level banking system, Russian banks will be divided into two categories: (i) banks with a "basic" license and (ii) banks with a "universal" license. They will differ in terms of allowed banking operations and, respectively, the requirements to their net worth (capital), mandatory ratios to be complied with, the information to be disclosed and the ability to have subsidiaries abroad.

In particular, the banks with a basic license:

  • are not entitled to make certain operations with foreign companies and foreign individuals, namely: provide loans, attract into deposits and lend precious metals, issue bank guarantees, as well as acquire rights of claim to those persons, make leasing operations with them and provide suretyships in relation to such persons;
  • are not entitled to open correspondent accounts with foreign banks (other than for the purposes of participating in a foreign payment system);
  • must comply with certain limitations on operations with securities;
  • are not entitled to establish branches/representative offices and have subsidiaries abroad (save for certain exemptions);
  • may disclose less information on their business than banks with a universal license;
  • must ensure that the maximum exposure per single borrower or group of related borrowers does not exceed 20% of their net worth (capital) (as opposed to 25% for banks with a universal license); and
  • must comply with the mandatory reserves requirements that may differ from those established for banks with a universal license.

As of 1 January 2018 the minimum net worth (capital) will be RUB 300 million for banks with a basic license RUB 1 billion for banks with a universal license.

All acting banks shall be considered as banks with a universal license as of 1 June 2017 (the date of the amendments' entry into force).

If as of 1 January 2018 the net worth (capital) of a bank with a universal license is less than RUB 1 billion (but no less than RUB 300 million), then:

  • before 1 January 2019 the bank must change its status to a bank with a basic license, a non-banking credit organization or a micro-finance organization;
  • before 1 February 2019 the bank is entitled to apply to the Bank of Russia asking for permission to continue operating as the bank with a universal license, provided that as of 1 January 2019 and during four months prior to that its net worth (capital) is no less than RUB 1 billion and it complies with the mandatory ratios established for banks with a universal license.

The Law will enter into force on 1 June 2017.

On 1 May 2017 the President signed Federal Law No. 84-FZ amending the Law on Banks and a number of other laws.

According to the law introducing the amendments, the Bank of Russia will be able to take part in rehabilitation of "problem" banks through the Fund of Consolidation of the Banking Sector (the "Fund") and the management company of the Fund which are to be established by the Bank of Russia. The Deposit Insurance Agency will retain its ability to take part in rehabilitation of banks.

At the expense of the Fund, the Bank of Russia will be able to acquire shares of "problem" banks, provide loans (including subordinated) to them, place deposits, issue bank guarantees, acquire assets of such banks and rights of claims to them. It can also transfer the acquired shares, assets, rights of claim into the trust management of the management company of the Fund, including for the purposes of establishing unit investment funds. It is assumed that the Bank of Russia will sell the acquired shares after the rehabilitation process is complete.

The law also provides that upon approval of a plan for the Bank of Russia or the Agency to participate in preventing bankruptcy of a bank, the bank's obligations towards its management and controlling persons will terminate. This applies to loan and other monetary obligations, but does not apply to obligations arising (i) from labor contracts (other than various premium pay-offs), or (ii) in connection with claims for compensation for damage to health or loss of life.

Most of the changes will enter into force on 16 June 2017.

On 2 May 2017 the Bank of Russia issued Directive No. 4368-U amending Instruction No. 149-I regarding inspections conducted by the Bank of Russia.

According to the amendments, in case of prolongation the aggregate term of the inspection may not exceed 200 business days – for a complex inspection and 180 business days – for a topical inspection of a systematically important credit organization or a member of the banking group where such organization is a parent (previously, – 105 and 90 business days respectively).

The Directive entered into force on 2 May 2017.


On 31 March 2017 the Bank of Russia issued Directive No. 4335-U "On the Maximum Value of Transactions Entered into by JSCs and LLCs Exceeding Which Such Transactions Can Be Qualified as Interested Party Transactions".

According to the Directive the rules on interested party transactions shall apply to transactions where the price or the balance sheet value of a company’s property under such transaction does not exceed 0.1% of the balance sheet value of such company’s assets if the transaction’s value is more than (i) RUB 20 million – for companies which balance sheet value of assets does not exceed RUB 25 billion; (ii) RUB 50 million – for companies which balance sheet value of assets is equal to or more than RUB 25 but less than RUB 100 billion; (iii) RUB 500 million – for companies which balance sheet value of assets is equal to or more than RUB 100 but less than RUB 1 trillion; (iv) RUB 1 billion – for companies which balance sheet value of assets is equal to or more than RUB 1 but less than RUB 2 trillion; and (v) RUB 2 billion – for companies which balance sheet value of assets exceeds RUB 2 trillion.

The Directive entered into force on 13 May 2017.

Click here to download PDF (English and Russian).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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