Regulating banking market in the course of antimonopoly policy

The report on the issue was given by Deputy Head of FAS Andrey Kashevarov at the International Banking Forum on 9 September 2016 (the IV session – “Practice of Supervision and Inspection of Financial Markets Participants”).

The XIV International Banking Forum – “Banks of Russia – the XXI century” took place in Sochi in 7-10 September 2016. It was organized by the Association of Regional Banks.

Apart from FAS staff, other attendees traditionally included representatives, the State Duma of the Federal Assembly of the Russian Federation, the Federation Council of the Federal Assembly of the Russian Federation, the Ministry of Finances, the Bank of Russia, other ministries and departments, as well as the leading financial market analysts, top-managers of banks and other companies.

The main agenda of 2016 Forum focused on the monetary policy; cost-effectiveness and liquidity of the banking sector in the modern economic situation; developing the national guarantee crediting system for small and medium business; accessibility and security of the national payment tools.

The antimonopoly authority at the Forum was represented by Deputy Head of FAS Andrey Kashevarov.

Andrey Kashevarov began his speech with information about the level of economic concentration on the market of banking services, which, except some incidents, remained high during past years. He paid special attention to the fact that more than half of the total services rendered on these markets falls to the three largest banks.

In this context Andrey Kashevarov commented the coming changes in the banking legislation on introducing proportional regulation over credit organizations: “FAS supports the initiative to introduce proportional regulation of the banking market; however, if a decision on any restrictions of banking operations in the regions are made, such restrictions should not affect the configuration of the work of banks and business in general”.

Then Andrey Kashevarov gave some statistical data on violations of the antimonopoly law in the past 2.5 years, according to which by now, as a result of the so-called “forth antimonopoly package”, the number of cases opened on both the banking market and the financial markets in general went down considerably due to preventing relevant violations.

The speaker also outlined the intermediary results of the efforts of the system of antimonopoly bodies to suppress unfair competition on the market of bank accounts: attracting funds of physical persons to such accounts on particular conditions and later worsening their consumer qualities.

As separately underlined by Andrey Kashevarov, FAS supports a decision made by one of the banks involved in unfair competition on the markets: the decision by “Tinkoff Bank” JSC to pay the under-paid interests on deposits upon a FAS determination. The sum is currently 151 million RUB for more than 9000 depositors. According to Deputy Head of FAS, the bank continues paying the interests on expired deposits that were not paid as a result of violating the antimonopoly law.

Finally, Andrey Kashevarov outlined FAS legal-and-regulatory work, particularly in banking insurance.

Deputy Head of FAS stated that FAS had succeeded in its legal-and-regulatory efforts by “creating conditions to minimize possibility of emerging or increasing the dominant position on the market of particular banks due to depositing the money from the capital repair fund for common property in apartment blocks and to diversify the risks when depositing the fund assets in banks”.