The Central Bank of the Russian Federation has specified plans to introduce differentiated premiums to risk ratios for foreign currency assets of banks.
The regulator posted on its website a draft instruction „On Amendments to Bank of Russia Ordinance No. 5782-U dated April 20, 2021”.
As promised by the Central Bank, allowances for loans and loans to legal entities in foreign currency, as well as investments in debt securities denominated in foreign currency, are planned to be differentiated depending on the issuer of the currency (friendly or unfriendly countries).
In addition, the premiums on such credits and loans will be differentiated depending on the sufficiency of the borrower’s foreign currency earnings to fulfill its obligations (exporter or non-exporter).
The Central Bank proposes to set premiums for risk ratios in relation to the following requirements for credits (loans), as well as investments in debt securities:
- to legal entities-exporters in the currency of unfriendly countries;
- to other legal entities in the currency of unfriendly countries;
- to other legal entities-exporters in the currency of friendly countries;
- to other legal entities in the currency of friendly countries.
The current criteria for recognizing legal entities as exporters are supposed to be conceptually retained.