Central Bank to Limit Shady Transactions
- The Moscow Times
- Jul. 22 2013 00:00
- Last edited 16:28
TheáCentral Bank is trying toálimit lenders depositing money with their foreign counterparts byáreclassifying theátransactions as high-risk, which would make them more expensive andáless attractive, Kommersant reported Friday.
Aárecent amendment toáthe instructions foráthe statutory requirements ofábanks reclassifies cross-border transactions as high risk, regardless ofáhow reliable theáforeign recipient bank is.
The limits apply to transactions that require the involvement of a third party and operations with non-resident banks.
Theáreclassification focuses onátransactions that require theáinvolvement ofáa third party, but also operations with non-resident banks that lend toáoffshore companies andáare then unable toáreturn theámoney toáthe Russian bank when theádebtor defaults onárepayments.
Banks could have their licenses revoked if they do not comply with theánew regulations.
"By creating this rule, theáregulator goes fromátalking with theábanks about theátransparency ofáoperations andárecommendations forácorrecting them toátalking about financial requirements," Central Bank deputy chairman Mikhail Sukhov told Kommersant.
He hopes that more regulation will stop Russian banks fromálosing large sums ofámoney toáforeign banks, as was theácase with Vitas, which lost 300 million rubles ($9.3 million) toáMeinl Bank ináAustria. Petroff Bank also lost $50 million andá600 million rubles toáa Swiss bank.
Having more Central Bank representatives inábanks "will increase theáchance ofáidentifying suspicious transactions with non-resident banks," Sukhov said.
Theáchanges would still allow companies toáwork with banks abroad if they are prepared toácover theáwithdrawal ofáexisting assets themselves.
Suspicious transactions are generally easy toáidentify, said Alexei Terekhov of auditing firm FBK, andátheáincreased role ofáregulators and their ability toáreclassify risk could create conflict with theábanks.
Central Bank data on Friday showed it did not add gold to its reserves for the first time in nine months in June, when bullion prices fell by more than 10 percent to their lowest in nearly three years, Reuters reported.
Russia's gold reserves remained unchanged at 32 million troy ounces in June compared with May, the central bank said on its website on Friday. The bank declined to comment on the reason.
The value of the holdings fell to $38.6 billion as of July 1 from $45 billion a month earlier, it added.
The last time the bank did not add gold to its reserves was in September 2012, when they amounted to 30 million troy ounces. It bought gold in every month from October 2012 through May 2013.
Russiaáhas been the biggest gold buyer in the official sector in the past decade. A shift by central banks from major sellers of bullion to net buyers has been a major support to the gold market in recent years.
Gold fell $200 an ounce in less than two weeks last month after the U.S. Federal Reserve signaled it was set to rein in its $85 billion in monthly asset purchases later this year and halt stimulus altogether by mid-2014.
Ultra-loose monetary policy, which kept long-term interest rates at rock bottom and stoked fears of inflation, was an important driver of the rise in gold prices to record highs in 2011.