18 Aug 2022 19:43

CBR not to worsen classification group of banks for assessment of economic situation through end of year

MOSCOW. Aug 18 (Interfax) - Amid conditions of high volatility, the Central Bank of Russia (CBR) through the end of the year will not worsen the classification group of banks used for assessing the economic situation, if it is affected by external circumstances and the situation on the financial market.

The relevant letter signed by the First Deputy CBR Governor Dmitry Tulin was published on the regulator's website.

The Central Bank said Thursday that the classification group of lenders will not be worsened from the group assigned as of January 1, 2022, until the classification as of January 1, 2023, provided that changes in indicators characterizing the economic situation of banks are associated with external circumstances and the situation in the financial market.

Assessment of the economic position of banks is regulated by CBR instruction No. 4336-U. The Bank of Russia uses this directive for supervisory purposes to assess the riskiness of lender' banking business. A bank's location in a higher or lower economic position group affects its supervisory regime or access to Central Bank refinancing.

The regulator monitors the economic situation of banks by assessing their capital, assets, profitability, liquidity, interest rate risk, concentration risk, mandatory ratios, management quality and transparency of ownership structure. Based on the evaluation of these indicators, the regulator divides banks into five groups (the first group includes the most stable credit institutions, while the fifth group includes banks at risk of license withdrawal).