Banks with high deposit rates to pay 40% more to Deposit Insurance Fund - DIA deputy head
MOSCOW. October 16 (Interfax) - Banks carrying out risky policy and raising retail deposits with high interest rates will probably pay 40% more into the Deposit Insurance Fund, Deposit Insurance Agency (DIA) Deputy Chairman Andrei Melnikov told Interfax.
The Finance Ministry, Central Bank and DIA are currently discussing this, he said. "We have no objections," Melnikov added.
Banks currently pay in 0.1% of the amount of deposits raised per quarter to the Deposit Insurance Fund. If the new regulations are introduced than banks raising high rate deposits will pay in 0.14% per quarter. If a bank has even just one deposit with a rate that the Central Bank of Russia considers risky than it will pay in the additional funds to the Deposit Insurance Fund for the quarter "from the entire deposit base," he said.
The changes to legislation envisage that the Central Bank will establish procedures for determining deposit rates that it considers risky, he said.
At a meeting chaired by Prime Minister Dmitry Medvedev in early October, a principle decision was made on raising the level of insurance compensation for retail deposits from 700,000 rubles to 1 million rubles. Departments were asked to identify mechanisms to discourage particularly risky banks from significantly raising interest on deposits.
The Central Bank of Russia monitors the retail deposit rates of the top 10 banks every ten days. The Central Bank warned that it will pay particular attention to banks offering deposits with rates that are more than two percentage points over the average maximum rate of the top 10 banks. The average maximum deposit rate in the first ten days of October was 9.4% per annum.
