The overhaul of Russia’s banking sector is in full swing. Citing Bank of Russia leader Elvira Nabiullina, the cleanup of the banking sector is more than half complete. “In 2017 the Bank of Russia revoked licenses from over 50 banks. This number is almost twice fewer than in 2015 and 2016. The central bank had to make three landmark decisions. Nevertheless, bearing in mind these tough decisions we think that we have nearly accomplished our crackdown on the Russian banking sector against clearly ailing participants,” the policymaker commented.
Now, the time is ripe to identify so-called predatory banks. “We realize that some banks founded in 1990s and early 2000s were aimed at grabbing money from clients as the money collected was misused to fund business of the banks’ owners. Such a scheme is doomed to failure,” the regulator’s chair noted. In other words, more banks are likely to be terminated sooner or later.
At present, the regulator is closely monitoring the banks which allocate a big share of clients’ funds for financing business of their owners. Elvira Nabiullina called on such banks to shift urgently to an accepted business model. She warned rogue banks to reconsider their business principles.
