Official website of the President of Russia

Документ   /

President of Russia Vladimir Putin: Ms Nabiullina, I know that you are working with the Government on establishing a national payments system. I would like to hear about how the work is going. I would also like to hear of course about the state of our financial system in general and the measures you are taking to improve the sector.

Governor of The Central Bank Elvira Nabiullina: Recent legislative amendments were passed making it possible to establish a full-fledged national payments system so that people here who use bank cards and are already used to this way of doing things will know that they are safe from any unfriendly action taken by parties outside Russia.

“The agencies responsible for protecting depositors’ interests must comply fully with the laws and this is also something we need to carefully monitor. The Deposit Insurance Agency must respond swiftly to events.”

We are carrying out a broad range of measures in this area. First are the short-term measures. We are working together with the banks to get them linked into a common network and establish the inter-hosting technical links that will make the system reliable right now in the short-term timeframe. The next set of measures is about establishing processing centres here in Russia, operations clearing centres, so that cards performing the full range of functions can be issued here by our banks and using our technology and developments, and so that all processing of transactions will take place here on Russian soil. 

We have already drafted an action plan. The Central Bank has set up a commission that includes representatives from the Government and the parliament. The experts are examining the existing technology here in Russia to select which developments we can use. Technological solutions will be ready very soon and I think it will then take around 18 months to establish a full-fledged payments system. 

At the same time, we are in talks with Visa and MasterCard on conditions for their work in Russia. I hope that we will soon resolve all of the concerns related to their operations here.

Vladimir Putin: Good. What about the banking system’s general situation and the measures you are taking to improve it?

Elvira Nabiullina: The banking system is showing quite steady development overall. I can give the latest figures: the banking system’s assets grew by 6.4 percent over the last five months, which is a decent growth figure; loans to the economy were up by 8 percent; and loans to individuals were up by 5.5 percent, but here, we were implementing a policy to slow growth in individuals’ debt.

Housing mortgage lending is developing well and grew by 9.4 percent over the four-month period. To take the yearlong period, it increased by 34.4 percent over the last 12 months.

Vladimir Putin: So we are seeing growth?

Elvira Nabiullina: Yes, this is growth. These are good figures and they show that banks are in large part refocusing their activities from unsecured lending to consumers to housing mortgage loans instead. This is boosting the housing construction sector’s development, and in this respect the banking system is on a stable footing.

In any case, we conduct regular stress tests. In other words, we simulate negative scenarios to work out what might happen in the banking system in the event of this or that development. Overall, the banking system withstands the stress tests and is in quite a stable situation.

But there are nevertheless some players in the banking system that take excess risk with others’ money, with the money they raise from depositors, from individuals and companies. In these cases we are forced to take quite harsh measures that include not just revoking licenses but also raising demands on these banks to comply with the law, not raising demands rather but simply enforcing normal demands. 

The banking system is quite responsive overall and is carrying out more accurate assessments of loans’ quality and setting aside the necessary reserves so that it will always have resources at its disposal if anyone fails on their loan payments.

This process is underway. It is our priority of course to protect the interests of ordinary depositors in this work, but sometimes we have no choice but to take the extreme measure of revoking a bank’s license if we see that it is carrying out an aggressive policy that is risking depositors’ money. If we leave such banks on the market too long, the problems will only grow, and so we think it very important to take timely action. Of course, when we do this, depositors’ rights are protected by the deposit insurance system too.

Vladimir Putin: This brings me to a question: are you implementing in full all legal provisions related to protecting depositors’ interests? 

Elvira Nabiullina: Yes, there is no question that we are implementing what the law demands.

Under the law, deposits of up to 700,000 rubles [more than $20,000] are insured, and the Deposit Insurance Agency makes the required payments in accordance with the timeframe set by the law.

Of course, work must become more efficient when it comes to assets – the so-called bankruptcy proceedings – so as to obtain a greater share of what assets do remain and use them to return more money to non-insured depositors. I think that supervisory measures alone are not enough to improve the situation here. We also need to place greater responsibility on the owners and managers of banks that get themselves into such a state. 

The Duma is currently examining a draft law introducing criminal liability for false financial reports, because we see from the cases when licenses have been revoked that banks often provide false and inaccurate reports and hide the real situation in their institutions. In this respect, we need to impose greater responsibility on banks’ owners and managers.

Vladimir Putin: This goes without saying, but at the same time, the agencies responsible for protecting depositors’ interests must comply fully with the laws and this is also something we need to carefully monitor. The Deposit Insurance Agency must respond swiftly to events. I realise that it is not the Central Bank, but your actions should take into account and be commensurate with the Agency’s possibilities.

Elvira Nabiullina: Yes of course. If the economic possibilities allow us to do so, we always act to clean up where needed in the sector, and the Deposit Insurance Agency works accordingly.

Vladimir Putin: Thank you.

<…>