PRESS: Russian cbank prepares system for assessment of borrowers

MOSCOW, Mar 28 (PRIME) -- The central bank and banks are discussing the regulator’s own model of large borrowers’ assessment to calculate reserves that banks will have to form against such loans, Kommersant business daily reported on Tuesday quoting top managers of large local banks.

The authority plans to rate some of large borrowers depending on their assets, and banks will have to form reserves on the basis of the rating and not on the basis of general regulations. The regulator’s risk analysis department is developing the methodology, sources told the business daily.

“The regulator is determined to do it, as situations when a bank’s reserves do not correspond to real conditions of a borrower are becoming more and more frequent,” one of the sources told Kommersant.

A top manager at a large bank said that a borrower may service a loan fully and on time in one bank, restructure a loan at another bank, and have overdue debt in a third bank. If the regulator sets the volume of reserves for a borrower depending on the quality of its debt servicing in all banks, the overall reserves will grow.

The central bank declined to comment.

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