Russian banks to reveal sensitive data

Account holders at Russian banks are going to have a much clearer picture of how safe their deposits are thanks to new rules from the Central Bank of Russia.

From the beginning of next year the CBR will make public information regarding any regulatory investigations being carried out by the authorities on its website.

Such information has often been regarded as sensitive, along with any fines imposed for violations of banking regulations.

Analysts think this would benefit Russian banking by making it more open. “The information, which should published on CBR’s web-site will make Russian banking more transparent”, said Nikita Ignatenko from Investcafe. “Openness attracts clients and contributes to a growth in competition”, he added.

But some Russian bankers are concerned, that such unheard-of transparency is likely to shock clients and undermine the credibility of banks. “Generally the fight for openness is good, but openness doesn’t always lead to positive changes”, Andrey Egorov, acting CEO of SB-Bank told Kommersant Daily. “Some facts included in CBR’s list, for example information about unscheduled checks may be misinterpreted by clients and partners”. It could lead to deposit outflow and loss of liquidity, according to him.

They also fear that if the CBR starts revealing the names of those employees who committed violations even due to technical mistakes, this could exacerbate the lack of skilled personnel in Russian banking. However, it’s yet unclear if the CBR will name names.

New regulations are in compliance with a government decree against abuse of insider information, implemented on August 1. The decree was proposed and developed by Federal Financial Markets Service.