Russian President Vladimir Putin has signed amendments to the law "On Banks and Banking Activities" and certain legislative acts of the Russian Federation. The law is due to come into force on September 1, 2024. The relevant document has been published on the official Internet portal of legal information.
In accordance with the law, foreign banks will be able to open branches in the territory of the Russian Federation. Currently, they can only have subsidiary banks and representative offices.
A branch of a foreign bank will open and maintain bank accounts of legal entities; make money transfers on behalf of legal entities, including correspondent banks; collect funds, bills of exchange, payment and settlement documents and cash services for legal entities.
In addition, the branch will be able to issue guarantees and guarantees, lease special premises, safes for storing documents and valuables, conduct leasing operations, provide consulting and information services.
Supervision of the activities of branches of foreign banks will be carried out by the Bank of Russia.
According to the Deposit Insurance Agency, in case of revocation of a license from a foreign bank to conduct operations through its branch in the territory of the Russian Federation, the DIA will be appointed by the temporary administration of this branch.
Branches of foreign banks will not be participants in the deposit insurance system, while they will be required to deposit funds in a security deposit.
Due to this deposit, in case of revocation of the license from the branch, the interim administration, represented by the DIA, will make settlements with creditors. The deposit will consist of funds deposited in an account with the Bank of Russia, as well as investments in federal loan bonds or securities issued by the Central Bank on its behalf.
