Translated material
Europe is getting closer
New banking license will increase in price by one million euros
The Central Bank took a step towards the executive branch yesterday. Chairman of the Central Bank Viktor Gerashchenko announced his intention to increase the requirements for the minimum authorized capital of new banks from 1 million to 2 million euros. The government has long insisted on tightening these requirements. Observers regard Mr. Gerashchenko's statement as a gesture of goodwill, which is unlikely to seriously change the situation in the banking sector and will not lead to an increase in prices for ready-made banks on the secondary market.Discussions about the need to increase the minimum capital level of new banks have been going on in Russia since the mid-90s. The financial crisis forced us to forget about these plans for a while. True, taking into account the strengthening of the real ruble exchange rate that began in 1999, the nominal price of a new banking license decreased slightly. In the first quarter of 2001, the minimum authorized capital of a new bank was set at 26.15 million rubles, a bank applying for a general license - 130.75 million rubles, a subsidiary credit institution of a foreign bank - 261.5 million rubles.
Victoria Kotova from the Economic Expert Group does not rule out that the Central Bank's decision may affect the improvement of the image of the Russian banking system. According to Lyubov Lukashova from the Russian-European Center for Economic Policy, the Central Bank is signaling its intention to bring its requirements closer to European standards. To obtain a banking license in the EU, an investor must contribute at least 5 million euros to the bank’s start-up capital. Similar requirements have been established in the Baltic countries and Ukraine.
Most likely, the Central Bank’s decision will not affect the value of banks held for sale by their current owners. According to an expert from the Rating Information Center who wished to remain anonymous, the cost of a finished bank now ranges from $300,000 to $5.5 million. “The Central Bank’s regulations do not have a direct impact on prices on the secondary market, so only those who can “sell” this news to the buyer will be able to get additional income by increasing the requirements for the minimum authorized capital,” he says.