1 Feb 2019 10:51

CBR calls out unscrupulous poaching of clients from troubled banks

MOSCOW. Feb 1 (Interfax) - The Central Bank of Russia (CBR) has threatened to publicly name banks that unscrupulously poach clients away from lenders subject to compliance enforcement measures.

"The development of competition requires efforts not only from regulators, but also from banks themselves. Unfortunately, we are still seeing examples of unscrupulous competitive behaviour," Central Bank chief Elvira Nabiullina said at a meeting between bankers and the regulator at the Bor resort that was organized by the Association of Banks of Russia.

The latest example concerns Moscow Industrial Bank , the bailout of which was announced on January 22, she said.

"[I]mmediately after the announcement of the bank's bailout through the Banking Sector Consolidation Fund, representatives of other banks began to not just lure away the clients of Moscow Industrial Bank, but also scare them by telling them that they will lose their money, that the bank is just about to lose its license, and so on. We have documented evidence of this," Nabiullina said.

"I won't name the banks right now, but if this continues we will publicly talk about those banks that conduct such activities, unscrupulously poaching clients from one another. These are banks with quite a respectable image," Nabiullina said.

Such practices hurt the whole banking sector and undermine people's confidence in the banking system, she said.

"Such things are unacceptable, in our view. We've talked about this with the Association [of Banks of Russia], so that they see who is complying with codes of ethics and how, and sort out such cases," Nabiullina said.