Cbanker: Small business coverage not to harm deposit insurance

MOSCOW, Jun 26 (PRIME) -- Extension of insurance to small business depositors will have no significant negative impact on the financials of the deposit insurance system, First Deputy Central Bank Chairman Dmitry Tulin said on Monday at a meeting with the Federation Council, parliament’s supreme chamber.

“Our estimates show that a proposed extension of the deposit insurance system will have no significant outcome, will not significantly impact financials of the insurance system,” Tulin said.

”Additional contributions to the insurance system for these entities will amount to 8.5% of the total contributions to the system in 2018, when the system starts working under our estimates and payments on damage coverage to small businesses will amount to less than 6% of the entire coverage in accordance with the forecast.”

Anatoly Aksakov, chairman of the financial markets committee of the State Duma, the parliament’s lower chamber, is the author of a bill extending the deposit insurance system on small business. The State Duma can approve the initiative before August, he said.

Tulin said that he sees no possibility for the deposit insurance system to become self-reliant in the next two to three years because of large-scale repayments to household depositors, as the central bank continues to purge the banking sector from fraudsters.

The current contribution stands at 0.12% of an average quarterly retail deposit rate. Tulin said that the central bank is considering raising it to 0.15% or 0.20%.

He also said that creation of a united depositors’ register will not stop the malpractice of off-balance deposits entirely but will reduce incentives for fraudulent banks to open uninsured deposits. “The Central Bank of Russia is ready not only to support (the register initiative) but take the lead and fulfill all the necessary legal and organizational measures in this respect.”

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