10-01-2020 | 16:47

The document, drafted to fulfill the Road Map on competition development [1], provides methodological support and outlines possible measures to achieve the goal


The Report on recommendations about a package of the best practices on the financial markets in the regions of the Russian Federation is drafted with involvement of the Central Bank of Russia.


For instance, a filing procedure for participation of financial companies in regional soft financing programmes (subsidizing) should be established without any requirements to the companies except general requirements on legal capacity assessment.


It is also expedient to popularize the existing soft financing programmes in the subjects of the Russian Federation that are designed, in particular, to support small and medium business. For instance, regional authorities should form unified Registers of all soft financing programmes that exist in the regions with detailed descriptions of the conditions offered.


An important block of recommendations in the Report concerns competition stimulation and advocacy in the course of paying salaries, pensions and making other social payments.


Citizens of the Russian Federation can themselves choose organizations through which receive these funds.


At the moment, however, most of them may not be aware of this right. A probability remains that employers or staff of particular bodies and organizations impose in their benefit those credit companies that are advantageous for them, for example, under the frame of the so-called “payroll programmes”.


Such actions can result in artificial redistribution of demand and incur serious risks for restricting competition on the market of banking services.


The Report recommends, in this context, to undertake prophylactic efforts in order to prevent abuse of office by the staff when organizing cash payment.


Voluntary housing insurance is another important aspect in enforcement of the right of individuals to choose a financial organization.


Currently, payments for insurance services covering residential houses can take place simultaneously with payments for residential premises and utility services.


When payment of housing-and-utility services is done by electronic means (through personal accounts, mobile applications, etc.), the total sum of payments in some cases already include the sum for paying voluntary insurance services. I.e., people can exclude the insurance costs from the total payment sum by themselves only removing the relevant pre-installed markings.


The practice of pre-installed markings cannot be perceived as a univocal expression of consumer will and consent and to create artificial pre-requisites for an insurance agreement since rather than by a consumer as the markings are put by a legal entity that may be interested in acquiring additional services by the insured, particularly due to an agency agreement with a particular insurer (underwriter). As the services are provided on a fee basis, it is not obvious that putting the markings “by default” creates an unequivocally positive effect for consumers. Such practice can create advantages to particular insurers.


In this context, the report recommends to inform the population that such services are voluntary and that it is possible to choose services from any insurer involved in the relevant types of operations.


Such measures include:


separate accounting of the amount of payment for housing-and-utility services and the amount paid for voluntary housing insurance in payment documents as well as personal accounts of the population on the relevant resources or mobile applications;

giving the name of an insurance company in payment documents, personal accounts of the population and mobile applications, information about the sum insured under agreement and the list of covered insurance risks (or the source where consumers can obtain such information);

not allowing to use pre-installed marking in personal accounts or mobile applications that give consent to enter into voluntary housing insurance agreements.


The Report also emphasizes that back in 2018 FAS and the Bank of Russia issued a letter where the above bodies do not recommend financial organizations to highlight direct or indirect state participation in their capitals as an advantage when promoting their services. Using such information by financial organizations with public participation can create an impression upon consumers about extended reliability of those organizations, which in some cases can create a non-market advantage for them.


In this context, regulators recommend the regional authorities in Russia, participating in capital of credit organizations, to advise these credit organizations that they should not use the fact of state participation in their capital in order to promote their services.


Otherwise, actions of financial organizations can be considered unfair competition.


According to FAS, the Repot materials should create preconditions not only for establishing and disseminating positive competition development practices on financial markets, but also enable better awareness of regional executive bodies in Russia about the ongoing work of the federal centre in this area.


Deputy Head of FAS Andrey Kashevarov pointed out: “Competition on the financial market is the key factor for enhancing its performance that stimulates market institutions to improve their business-models, apply innovative solutions and better satisfy consumer demand”.


[1] 2018 - 2020 Action Plan (Road Map) for developing competition in sectors of the economy of the Russian Federation and transition of some sectors of natural monopolies to the state of a competitive market, approved by № 1697-р Decree of the Government of the Russian Federation of 16.08.2018.

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