The Bank of Russia plans to enforce stricter requirements on reserves and risk weights for loans granted to state-owned companies without legally binding shareholder commitments for financial support. The move was announced by Central Bank Chairwoman Elvira Nabiullina during an annual meeting organized by the Association of Banks of Russia, according to a transcript on the central bank’s website.
Key Details:
The new rules will require banks to assess the financial health of state-owned companies the same way as private companies if there are no explicit guarantees of state support.
Nabiullina criticized the automatic reduction of risk assessments based solely on state ownership, warning that the state is not always prepared to shoulder all obligations of state-backed companies.
The central bank will ban the use of expert adjustment factors to artificially lower reserves if there is no concrete state support, effective from October 1, 2025.
Policy Rationale:
The initiative aims to promote objective risk assessments and prevent banks from relying on implicit state backing when evaluating loans to state-owned enterprises.
Outlook:
The new rules are expected to increase capital requirements for loans to state-owned companies, potentially tightening credit conditions in Russia’s corporate sector.
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