YEREVAN, March 15. /ARKA/. President of Russia Vladimir Putin signed a bill banning foreign banks from opening their branches in Russia, PRIME agency reported Friday referring to the document.
The State Duma adopted the bill on February 22 and The Federation Council approved it on March 6.
Thus, as the law enters into force, the foreign banks will be only authorized to open subsidiaries in Russia instead of branches.
The reason for the law was that the notion of “branches of foreign banks,” unlike subsidiaries, were not subject to Russian jurisdiction.
Hence they are not fully controlled by Russian regulators.They don’t have to make deductions to Russia’s reserve funds or submit statements based on international or Russian accounting standards to the Central Bank, Russia Today clarifies.
Russian authorities think that such “privileges” could harm the competitiveness of Russian banks.
The current legislation simply limits foreign capital’s participation in the Russian banking sector.
The new legislation wants to see the word “branch” excluded from the Russian banking system and the phrase “foreign bank branches” is banned from articles concerning registration of lenders with foreign capital.
The government has prepared the bill in line with Russia’s entry into the World Trade Organization.—0-
