Bank of Russia simplifies required reserves creation

The Bank of Russia has drafted its regulation ‘On Credit Institutions’ Required Reserves’ in order to simplify required reserves creation and reduce credit institutions’ regulatory burden.

Instead of specialised reports prepared by credit institutions, required reserve amounts will be calculated by the Bank of Russia based on the reporting. In the course of the monthly regulation of required reserve amounts, only the averaged value will be changed, while balances of funds in required reserve accounts will be changed once a year. Furthermore, the new approach implies the mandatory averaging of required reserves, using a single averaging ratio applicable to banks or non-bank financial institutions.

The new approach cancels specialised inspections to control compliance with the mandatory reserve requirements, and updates the procedure for calculating and imposing penalties on credit institutions breaching the mandatory reserve requirements.

The new regulation is planned to become effective on 1 June 2021 and be applicable to credit institutions’ required reserve amounts for June 2021.

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