Central Bank of Russia to restrict the activities of banks with foreign investments

Central Bank of Russia to restrict the activities of banks with foreign investments

The representatives of the lower house of  Russian parliament supported the draft law "On Amendments to Article 18 of the Federal Law" On Banks and Banking Activity", in terms of setting for credit institutions with foreign investment restrictions on banking operations.

The bill provides for bringing Russian legislation into conformity with the standards of the Organization for Economic Cooperation and Development (OECD).

It is noted that unless otherwise provided for by international treaties of the Russian Federation, the Central Bank may establish for credit institutions with foreign investment restrictions on banking operations, if the relevant foreign countries will apply limits to formation and operation of banks with Russian investments and branches of Russian banks.

Experts believe that the implementation of the federal law probably will have a little impact on the majority of banks in Russia, and that the reciprocity clause will not apply to OECD member countries including the countries of the European Union, the USA, Japan, South Korea and Canada.

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