Home / Doing business in Russia 2020 / Banking sector / Legislative and regulatory framework
Doing business in Russia 2020
  1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. General approach
    2. Trade between EEU and non-EEU countries
    3. Mutual trade between the EEU members
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

Banking sector

The Russian banking industry is still characterised by a large number of credit institutions (836 as of 1 January 2020) and by a high level of concentration of capital.

In 2018-2019 the Central Bank of Russia (the “CBR”) continued its policy of reducing the number of credit institutions, aiming for their consolidation and the closer supervision of their activities in the current economic climate. Consequently, a noticeable number of banking licences were revoked in the last two years.

As of 1 January 2020, 60.3% of the banking sector’s total assets were held by the top five Russian banks1. State-owned banks2 continue to play a significant role in the stabilisation and development of the Russian banking sector.

[1] As of 1 January 2020, the top five Russian banks in terms of net assets are Sberbank (RUB 28.9bn, i.e. EUR 412.9m); VTB (RUB 14.3bn, i.e. EUR 204.3m); Gazprombank (RUB 6.5bn, i.e. EUR 92.9m); National Clearing Centre Bank (RUB 4bn, i.e. EUR 57.2m); and Alfa-Bank (RUB 3.8bn, i.e. EUR 54.3m); www.banki.ru/banks/ratings/ (all conversions are based on a notional rate of RUB 70 = EUR 1, as used for convenience throughout this guide).

[2] Such as Sberbank, VTB, Gazprombank, etc.

Legislative and regulatory framework
Licensing and operations
Deposit insurance
The anti-money laundering law
Bank secrecy
FATCA and CRS

Expertise

Banking & Finance

Legislative and regulatory framework

The legislative framework regulating the Russian banking sector is provided under Federal Law No. 395-1 “On Banks and Banking Activities” dated 2 December 1990 (the “Banking Law”) and Federal Law No. 86-FZ “On the Central Bank of the Russian Federation” dated 10 July 2002 (the “CBR Law”).

Credit institutions’ bankruptcy is regulated by Federal Law No. 127-FZ “On Insolvency (Bankruptcy)” dated 26 October 2002, which now governs the relevant procedures instead of the special bankruptcy procedures that were previously in force in the banking sector. These laws and related regulations:

  • define what is a credit institution1;
  • set out the list of banking operations and other transactions that may be performed by credit institutions;
  • establish the framework for the registration and licensing of credit institutions; and
  • determine the regime governing bankruptcy proceedings and the protection of credit institutions.

The CBR is Russia’s sole financial markets regulator. It is legally and financially independent from the Russian Government. The CBR consists of a Moscow-based Head Office, which includes its Board of Directors, the National Banking Council and central administrative departments, a number of regional branches in the various regions of the Russian Federation (which are called “National Banks” in certain republics), and its local departments.

Under the CBR Law and the Banking Law, the CBR is responsible for regulating banking activities and is authorised to adopt mandatory regulations concerning banking and currency operations. The CBR actively uses its powers and has created a detailed and extensive body of regulation on key areas, including: capital and net worth requirements – Directive No. 1260-U dated 24 March 2003 and Regulation 646-P of 4 July 2018; mandatory economic ratios and reserves – Instruction No. 199-I dated 29 November 2019 and Regulation 507-P dated 1 December 2015; currency control – Instruction No. 181-I dated 16 August 2017; and provision for losses – Regulation No. 590-P dated 28 June 2017.

[1] Here and further, banks and non-banking credit institutions. Back ↑

Key contacts

Expertise

Banking & Finance