CBR boosting mandatory provisioning requirements for liabilities in rubles, FX staring in Aug

MOSCOW. July 25 (Interfax) - The Central Bank of Russia (CBR) will increase mandatory provisioning requirements starting in August amid growth in the structural liquidity surplus, gradual normalization of the situation in the financial market and in order to maintain the trend towards deforexation of lenders' balances, the regulator said in a statement.

In particular, the standard requirements for all categories of provisions in rubles for banks with universal license and non-banking credit institutions will be increased by 1 percentage point, up to 3%. For banks with a basic license, the required provisioning requirements for ruble liabilities remain unchanged.

In addition, provisioning requirements on all categories of FX liabilities will be increased by 1 p.p. up to 5% for all banks. Requirements for non-bank credit institutions will be increased by 3 p.p.

The new standards will apply to regulation of the amount of required provisions beginning in August 2022.

According to the schedule of averaging mandatory provisioning for 2022, the regulation of the amount of mandatory provisions for August 2022 does not involve recalculation of the mandatory provisions deposited on provisioning accounts. Thus, as a result of the raised requirements, the total amount of mandatory provisions will increase only due to the averaging amount, and the amount of mandatory provisions on the accounts will not change.

Given the expected growth in the structural liquidity surplus, the CBR plans to continue a gradual increase in the mandatory provisioning requirements for all categories of provisionable liabilities in Russian currency for banks with a universal license and non-bank credit institutions and for all categories of liabilities in foreign currency for all lenders:

- tentatively up to 4% and 7%, respectively, starting from the regulation of the amount of the mandatory provision of credit institutions for January 2023;

- tentatively up to 5% and 8%, respectively, starting from the regulation of the size of credit institutions' mandatory provisions for June 2023.

Other reserve requirements for all categories of provisionable liabilities in rubles for banks with a basic license should remain unchanged.

Information on the size of the mandatory provisioning ratios to be established in 2023 and the terms of their application will be provided additionally.