Instruction No. 135-I of the RF Central Bank dated 2 April 2010 entered into force on 11 May 2010

Pepeliaev Group hereby informs that Vestnik Banka Rossii published on 30 April 2010 Instruction No. 135-I of the RF Central Bank dated 2 April 2010 “On the Procedure Governing the Adoption by the RF Central Bank of a Decision on the State Registration of Credit Institutions and Issue of Bank Licences” (hereinafter – Instruction No. 135-I), which enters into force within 10 business days of the date of its official publication.

Instruction No. 109-I of the RF Central Bank dated 14 January 2004 “On the Procedure Governing the Adoption by the RF Central Bank of a Decision on the State Registration of Credit Institutions and Issue of Bank Licences” (as amended) (hereinafter – Instruction No. 109-I) will remain in effect until the date of the entry into force of Instruction No. 135-I.

At the same time, Instruction No. 135-I represents the valid Instruction No. 109-I, which also includes a number of additional provisions, inter alia:

• The Instruction stipulates that a bank must, in order to be eligible for participation in the deposit insurance system, disclose to the public at large information about the parties that have a material influence (either direct or indirect) on the decisions taken by the bank’s government bodies pursuant to the procedure established by the Bank of Russia (such a procedure was established by Instruction No. 1379-U of the Bank of Russia dated 16 January 2004 “On the Assessment of the Financial Stability of a Bank to Determine its Sufficiency for Participation in the Deposit Insurance System”).
• The Instruction specifies the procedure for controlling the legitimacy of payments for shares of or a participatory interest in a credit institution while verifying the sources of funds invested as payment for shares (participatory interests), the financial position of the acquirer of the shares (participatory interests) and availability of its own funds (net assets) that are sufficient to pay for the acquired shares of or a participatory interest in a credit institution. The Instruction stipulates that it is necessary to conduct an audit directly in the credit institution if the authorised capital is increased by more than twenty percent and also if there are grounds, which attest to the violation of established requirements on payment for shares of or a participatory interest in the credit institution. The check is not mandatory in cases where:
• payment of no less than 75 percent of the increase in the authorised capital is performed with the funds of international development banks, the state and local authorities;
• a credit institution has its own assets (capital) amounting to no less than RUB 180 million and parties with a high long-term credit rating (stable financial position) that own no less than 75 percent of the total increase in the authorised capital will have either directly or indirectly a material impact on the shareholders (participants) of the credit institution.
• The Instruction excludes provisions regarding the payment of state duty for state registration of a credit institution and for the granting of a bank licence, as these provisions are stipulated by the Russian Tax Code.

Instruction No. 135-I also contains provisions relating to the exclusion of exchange offices from the list of internal structural units of credit institutions (or subsidiaries).

At the same time as Instruction No. 135-I, Instruction No. 2423-U of the Bank of Russia dated 2 April 2010 “On the Assignment of the Status of Other Internal Structural Units of Credit Institutions (Subsidiaries of Credit Institutions) to Exchange Bureaus, the Closing of Exchange Bureaus and the Streamlining of the Operations of Internal Structural Units” (hereinafter Instruction No. 2423) was published and also came into force on 11 May 2010. Instruction No. 2423 stipulates that exchange bureaus opened by credit institutions before 11 May 2010 must either be re-qualified as other internal structural units (with the exception of movable cash offices), or closed by 1 October 2010. Instruction No. 2423 also establishes the procedure governing the discharge of this requirement by credit institutions (subsidiaries).

For further information, please contact:

in Moscow – Lidia Gorshkova, Head of the Banking Practice, at: (495) 967-0007 or by l.gorshkova@pgplaw.ru

in St Petersburg  -  Sergey Spasennov, Head of St. Petersburg office, on tel.: (812) 333-07-17 or by s.spasennov@pgplaw.ru