Until November 1, 2017, all banks with assets above 500 billion rubles. must submit special reports to the Central Bank on risk management systems and procedures for assessing capital adequacy, said Central Bank Chairman Elvira Nabiullina.

By the end of this year, the Central Bank will conduct a full assessment of the quality of risk management systems and an assessment of capital adequacy of the largest banks. The regulator is interested in the quality of risk management and capital planning, Nabiullina clarified. Banks with assets less than 500 billion rubles. inspection awaits next year.

“If we find that the volume of available capital is insufficient to cover risks, or the quality of risk management is insufficient and in the future the bank may face a shortage of capital, we will establish individual increased requirements for capital adequacy,” the chairman of the Central Bank promised. If a bank violates individual increased standards, the regulator may impose a restriction or ban on certain transactions, Nabiullina added.

“This is a fundamentally new approach to supervisory actions for our system. That is, the Central Bank will analyze not only individual transactions and decisions of the bank’s management, but will comprehensively assess the quality of risk management,” she explained. Supervisory requirements will not be imposed after the fact, but preventively, Nabiullina concluded.

At the same time, she proposed introducing responsibility for bank managers, in particular, giving the Central Bank the right to postpone the payment of bonuses and dividends in those banks that are experiencing problems, until such problems are corrected. “In the end, if the activities of managers lead to the bank leaving the market or being sanitized using public money, then it is unlikely that the work of the management of this bank can be considered effective and worthy of bonuses,” she said.

The Central Bank will conduct an audit of the internal procedures for assessing capital adequacy (ICAAP) of the largest banks as of January 1, 2017, and of medium-sized banks as of January 1, 2018. The latter can finalize their internal procedures by the end of the year: it is still difficult to say how the regulator’s audit will end , says HSE Associate Professor Heinrich Penikas.

Most banks are afraid of the lack of precedent for such verification, he notes. However, in the assessment methodology, which the Central Bank published back in 2015, there are terms that leave room for interpretation, says Penikas. “The most pessimistic outcome of the audit for the bank may be a tightening of capital adequacy requirements by 3 percentage points. The current version of the document states that the surcharge should be applied to the actual value of the standard, and not to the minimum capital adequacy standard. This practice does not exist in any country in the world,” he says, adding that the Central Bank promised to adjust this point based on the results of the inspection of the largest banks.

According to kuap.ru, as of August 1, 2017, 18 Russian banks had assets of more than 500 billion: Sberbank , VTB , Gazprombank , VTB24, Rosselkhozbank , Alfa Bank, FC Otkritie, Moscow Credit Bank, Promsvyazbank , Binbank and its sister bank, Rost Bank, Unicredit, Rosbank, Raiffeisenbank , Bank Rossiya, Sovcombank and Bank St. Petersburg.

According to some statements by the Central Bank, the regulator has questions about the adequacy of risk management in the bank, based on which we can conclude that the bank may not receive a satisfactory assessment, S&P analyst Dmitry Nazarov is sure.

Banks unanimously assure that there will be no problems with verification. Group press service The VTB stated that the group’s banks have fully implemented the requirements of the internal procedure for assessing capital adequacy. Representatives of the banks St. Petersburg, Sberbank, Alfa Bank and UniCredit Bank say the same thing. A representative of Gazprombank clarified that the credit institution implemented many of the procedures prescribed by the Central Bank long before their presence became a regulatory requirement.

The Central Bank will inspect large banks