On Nov. 21, RUS CB proposed limits on indebtedness of companies.
RUS CB proposed ord on types of assets, characteristics of types of assets for which risk coefficient surcharges are established, and on the application of surcharges to the specified types of assets when credit institutions determine capital adequacy standards with explanatory note.
Consultation documents are only available on RUS CB website until comment deadline.
Proposals
According to the ordinance RUS CB plans to set macroprudential premiums for banks on new loans and bonds of large corporate borrowers with a high level of debt burden.
The criteria for classifying companies in this category are outlined in the ordinance.
Borrowers with consolidated debt exceeds 2% of the banking sector capital will be considered large and companies with an increased debt burden is going to include borrowers whose interest coverage ratio with operating profit is less than 3%.
Per the proposed ordinance surcharges will be applied if both criteria are met and the total debt of the borrower and related persons to the bank exceeds 100bn RUB.
These measures will help limit indebtedness of large firms and credit risks of banks.
The ord was prepared to replace ordinance 6411-U on capital adequacy, #163694.
Effectiveness
Comments and feedback are expected by Dec. 5, 2024.
Dec. 2024 Comments
On Dec. 16, 2024, RUS CB issued comments and feedback to the proposed ordinance.
In Dec. 2024, RUS CB updated bank regulation deadline requirements, see #163694.
Dec. 23, 2024 Ord Issued
On Dec. 23, 2024, RUS CB issued ord 6960-U on types of assets, characteristics of types of assets for which risk coefficient surcharges are established, and on the application of surcharges to the specified types of assets when credit institutions determine capital adequacy standards.
The ordinance enters into force on Feb. 1, 2025.
Regulators
RUS CB
Entity Types
Bank; CNSM; CU
Reference
PR 12/23/2024; Ord 6909-U, 12/16/2024; PR, 11/21/2024; PR 6411-U, 4/17/2024;
