Russian Banking Licensing

Legislative Framework

Banking licensing in Russia is governed by the Federal Law on Banks and Banking Activities (No. 395-1 of 2 December 1990) and the Federal Law on the Central Bank of the Russian Federation (No. 86-FZ of 10 July 2002). The Central Bank of Russia (CBR, Bank Rossii) is the sole authority responsible for licensing credit institutions, exercising supervisory powers, and maintaining the register of credit institutions. The licensing regime is supplemented by CBR regulations that specify the detailed requirements for obtaining and maintaining a banking licence.

The CBR’s licensing authority includes the power to: grant, suspend, and revoke banking licences; impose conditions on licensed activities; conduct inspections of licence applicants; and maintain the State Register of Credit Institutions. The CBR exercises these powers through its Banking Supervision Committee and territorial branches.

Types of Licences

The Russian banking licensing framework distinguishes between basic (bazovaya) and universal (universalnaya) licences, a distinction introduced by the 2013 banking reform to create a two-tier banking system. The classification determines the scope of permitted activities and the applicable regulatory requirements.

Banks with a basic licence are restricted to core banking activities: accepting deposits, granting loans, and making payments. They are subject to simplified regulation and reduced capital requirements. Basic licence banks may not establish foreign branches, conduct certain securities operations, or engage in trade finance.

Banks with a universal licence may conduct the full range of banking activities permitted by Russian law, including: attracting deposits from individuals and legal entities; granting loans in all forms; opening and maintaining bank accounts; conducting currency exchange operations; issuing bank guarantees; and leasing operations. Universal banks must comply with enhanced capital, risk management, and reporting requirements.

The two-tier system was designed to reduce the compliance burden on smaller banks serving local and regional markets, while maintaining rigorous supervision of systemically important banks. By 2026, the majority of Russian credit institutions hold basic licences, with approximately 50 universal licence holders.

Minimum Capital Requirements

Capital requirements for credit institutions are established by Article 11.2 of the Federal Law on Banks and Banking Activities and by CBR Instruction No. 192-I. The minimum authorised capital (ustavny kapital) for a newly established bank is: 300,000,000 RUB for a bank with a basic licence; and 1,000,000,000 RUB for a bank with a universal licence. Non-bank credit institutions (nekreditnye finansovye organizatsii) — including settlement centres, depository institutions, and microfinance organisations — are subject to lower capital requirements established by industry-specific regulations.

The CBR requires that the authorised capital be formed exclusively from the founders’ own funds, not from borrowed funds or funds raised through public offerings. Contributions in kind to the authorised capital are limited and must be independently valued. The CBR has the power to refuse the registration of a credit institution if the quality or source of the capital is unsatisfactory.

Licensing Procedure

The procedure for obtaining a banking licence is regulated by the Federal Law on Banks and Banking Activities (Articles 12–16) and CBR Regulation No. 375-P. The applicant must submit a comprehensive package of documents to the CBR, including: the charter of the credit institution; the foundation agreement; a business plan; information on the founders and their financial position; and evidence of compliance with the CBR’s qualification requirements for management.

The CBR reviews the application within six months of submission. The review includes: verification of the documents’ completeness and accuracy; assessment of the founders’ financial standing and business reputation; evaluation of the business plan’s feasibility; and an assessment of the proposed management’s professional qualifications. The CBR may request additional information and conduct on-site inspections.

If the CBR is satisfied that the applicant meets all requirements, it issues a licence and registers the credit institution in the State Register of Credit Institutions. The licence may contain conditions restricting certain types of operations, for example where the CBR considers that the applicant’s experience or capital is insufficient for the full range of permitted activities.

Grounds for Revocation

The CBR may revoke a banking licence on grounds specified in Article 20 of the Federal Law on Banks and Banking Activities. Grounds for revocation include: failure to meet capital adequacy requirements within the prescribed period; failure to comply with CBR regulations on mandatory reserves; failure to satisfy creditors’ claims due to insufficient funds during a three-month period; significant misrepresentation in financial reporting; and failure to implement anti-money laundering measures.

The most frequently applied grounds are: capital inadequacy (failure to meet the minimum capital requirement); loss of liquidity leading to failure to meet obligations; and failure to comply with reporting requirements. The CBR may also revoke a licence where the credit institution engages in transactions that violate regulatory requirements or where the quality of management is unsatisfactory.

The revocation procedure begins with the CBR issuing a warning and setting a period for the elimination of violations. If the violations are not eliminated within the prescribed period, the CBR may appoint a temporary administration (vremennaya administratsiya) under the Law on the Insolvency of Credit Institutions (No. 395-1). If the violations cannot be remedied, the CBR revokes the licence and initiates liquidation proceedings.

Banking Licensing Reform (2013–2018)

The period 2013–2018 witnessed the most significant transformation of Russian banking regulation since the 1990s. The reform, initiated by CBR Governor Elvira Nabiullina, had two primary objectives: cleansing the banking sector of weak and fraudulent institutions; and strengthening the regulatory framework to meet Basel III standards.

The reform resulted in the revocation of approximately 350 banking licences between 2013 and 2018, reducing the number of operating credit institutions from over 900 to approximately 550. The CBR targeted institutions engaged in: fictitious capital formation; money laundering and terrorist financing; fraudulent financial reporting; and abusive lending practices. The cleansing (ozdorovlenie) programme was accompanied by the introduction of proportional regulation through the two-tier licensing system, the adoption of enhanced capital adequacy requirements, and the reinforcement of the CBR’s supervisory powers.

The reform established the Banking Sector Consolidation Fund (FCBS) as a resolution mechanism for troubled banks, replacing the earlier system of bailouts through the Deposit Insurance Agency (ASV). The FCBS was capitalised with federal budget funds and CBR contributions. The reform also strengthened the CBR’s early intervention powers, enabling it to impose corrective measures before a bank’s financial condition deteriorates to the point of insolvency.