Russia's Central Bank to delegate special envoys to banks receiving state’s financial aid
The Central Bank of Russia (CBR) plans to delegate special representatives to Russian commercial banks that have benefitted from the state’s huge financial aid package doled out by the government over the past months within the frameworks of the official anti-crisis programs aimed at keeping the local banks in operations in the country as they fight against the negative fallouts of the global economic malaise, Alexei Guznov, the deputy director of the CBR’s Legal Affairs Department, has said.
This new regulatory measure, according to Guznov, stems from the amendments being made to the current law regulating the CBR’s activities, which will give the nation’s principal bank the powers to delegate special envoys to banks that have received foreign-currencies-denominated credits from Vnesheconombank and subordinated loans on special terms from the government within the frameworks of the law on the provision of support to the Russian financial system and also other credit institutions that have placed parts of the government’s budget in their deposits or have received non-collateralized loans from the CBR.
The new policy will affect at least 140 banks, according to Guznov. “The delegation of a special envoy to a bank is a right, and not an obligation of the CBR, and therefore, we don’t intend to send envoys to all the 140 banks simultaneously. In short, there could be cases, when CBR will not even delegate any representative at all,” he noted. “But according to the current text of the amendments bill, these envoys are supposed to be delegated to all the banks from the very moment of receiving the state’s funding on special terms to the time of its complete repayment. This is how the situation currently stands, from the point of view of the law.”
According to the law, the representatives should be CBR employees, and the commercial banks are not in any way to impede their activities, including their right to demand for and receive all the information and documents on the banks’ credits-granting policy, provisions of guarantees, etc. To drive this message home to banks’ CEOs, the bill provides serious punishments for banks’ failure to honor the envoys’ requests as outlined in the law. “The main duty of the CBR envoys is not to keep an eye on how the banks are using the financial aid packages received from the state, but to undertake the analysis of such bank’s activities, as formulated in the law,” Guznov said. The special envoys can participate in the discussions of all issues at the meetings of the management boards of such banks, but are not expected to vote during decision making as they do not have any voting rights.”
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