Stricter control of Russian small banks – start of a new wave of liquidation?

In mid-2013 Russia started with an active consolidation of the Russian banking sector. Now, the Russian central bank has launched a new phase in creating a total control of the so-called small banks, ie institutions with an equity of less than 300 million rubles (6.4 million euros). According to the news portal Kaliningrad this was announced in a letter from the central bank’s deputy chairman Alexei Simanovsk to all regional offices.

Kaliningrad Domizil is of the opinion that this could mean a new wave of “liquidation” of the Russian banking sector.

The central bank sees a difficult future for small banks and consider it possible that they are trying to increase their capital from “unclear” sources. The central bank will not allow this. Therefore, small banks and any alteration of their capital is put under stricter control. The central bank has created a list of 106 banks which are observed with increased attention and controlled by strict rules.

According to Kaliningrad Domizil already 41 banks have lost their licenses this year. The analysts in the news portal expect that in total 80 banks will lose your license until the end of this year and the believe that up to 500 revocation of banking licenses will take place during the next three years.

Source: Kaliningrad