Banks wary of plans to extend list of reasons for license recall
MOSCOW, Oct 26 (PRIME) – Russian banks are worried about the central bank plans to extend the list of reasons to recall a banking license introducing a traffic lights principle with the red light meaning a client with a high risk, green light a low risk and yellow light the need to investigate the client further, the Association of Russian Banks said in a letter seen by PRIME on Tuesday.
"The draft law extends the list of reasons for revocation (annulment) of licenses from banks significantly, it does not take into account the principles reasonableness and proportionality for violation and punishment," the association said.
According to the letter, a bank can lose its license for violating the procedure of client notification of their risk status, which causes a special concern.
The association also said that the credit institutions that do not use the central bank’s evaluation method are in a privileged position because they do not carry the costs of informing the clients of their risk assessment status. It said that keeping the client informed is a continuous and costly process, while one of the goals of the bill is cutting operational costs.The association suggested placing information on assessment of companies’ and businessmen’ credit risk on the central bank’s website to simply the process and make it more transparent.
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