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Representative for Foreign Affairs and Security Policy Josep Borrell told a press conference following the EU Council meeting in Luxembourg on June 21.
Russian officials came up with a mechanism for negative rates on deposits of legal entities on June 20: interest will be charged, but the commission will be able to cover them A bill developed by the Ministry of Economic Development with the participation of the Central Bank will allow de facto negative deposit rates to be introduced, writes RBC. Officials decided not to reshape the legislation regarding the definition of a deposit (“the amount of funds transferred by a depositor to a bank in order to generate income”), but to get by with amendments to Article 29 of the Law “On Banks and Banking Activity”. It will be supplemented by a norm allowing corporate clients to charge commissions on deposits in any foreign currency. The amount of remuneration can exceed the amount of interest accrued on the deposit.
Several Russian banks have introduced a commission for servicing foreign currency accounts. The highest of these was set by Tinkoff Bank, which announced that it will charge a fee of 1% per month for servicing card accounts in dollars, euros, pounds, and Swiss francs with a balance of $1,000 or more. Within a few hours, Tinkoff ATMs began to run out of foreign currency. “This measure is due to the unreliability of foreign currency partners for Russia and is aimed at reducing the currency position of Tinkoff Bank,” the bank wrote in a Telegram post. Other banks to introduce a similar commission include Raiffeisenbank, Rosbank, Citibank, Promsvyazbank, Bank St. Petersburg, Uralsib, and RNKB, altogether more than a third of Russia’s top 20 banks. The Central Bank of Russia (CBR) opposes the commissions, arguing that they violate consumers’ rights. The CBR announced that they would investigate the legality of the measure. “The Bank of Russia understands the banks’ concern about the risks of working with foreign exchange, but nevertheless believes that banks should not worsen the terms of service for existing customers,” the CBR said in a statement.
The Ministry of Economic Development proposed to the sanctioned banks a scheme for separating frozen assets and foreign liabilities into a separate company, RBC learned. After that, all settlements on debts to non-resident clients will be performed only at the expense of the assets of the new company, that is, frozen ones. The scheme is non-standard and even extreme, but it theoretically allows banks to clear toxic assets and exclude standard capitalization, experts say. A separate bonus is that foreign creditors will have to seek unfreezing of assets from the respective governments.
The ministry also proposed to classify data on the gold reserves and foreign exchange reserves of Russia, the initiative passed the government
116 RUSSIA Country Report October 2020 www.intellinews.com