Since the 1st of July of the current year the Consumer Credit Act has come into force, which is focused on borrower’s rights protection. According to the passed law, the Bank of Russia will limit the maximum full amount loaned (FAL) of retail credits. The medium-term values of FAL will be published quarterly since the 14th of November 2014.
The mechanism of determination of the maximum value of FAL will be as follows: the Central Bank will estimate the mid-market FAL every three months, relaying on the data of 100 the biggest retail organizations. Herewith banks will be forbidden to exceed the FAL more than by one third from the recommendation of the main regulator. According to preliminary estimates of the Bank of Russia, the interest on credit cards should not exceed 45,9%, and on cash loans – 34,6%. However, banks don’t hurry just yet to approximate the cost of credits to the recommended values.
According to experts’ estimates, 20 from 100 the biggest retail banks have rates on credits being higher than the recommended level. Record-holders on the value of non-purpose credits became “Rusfinansbank” and “Alfa-bank”, with maximum rates 98,3 and 86% respectively. Maximum rates on cards were presented by “Renessans Kredit” and “MTS-bank”, with rates 79 and 55% respectively.
Representatives of the banks note, that such high rates on retail credits are explained by the difficult economic situation and high risks. At the same time the prominent players of the market of retail lending state, that they will bring the rate of FAL to the recommended values in the nearest time, in order to meet fully the requirements of the regulator. However, it goes no further than the statement just yet; so, for example, only in July of the current year 8 banks increased interest rates on retail credits (4 on credit cards and 4 on cash loans) and only one bank announced about the reduction of rates on credit cards.
The experts note, that forced reduction of rates will lead to that a number of prominent players will leave the market, and in the future the segment of the retail lending could be hold by microfinance organizations.
The Federal law №99-FL, making amendments to the Civil Code of the Russian Federation, comes into force as per the September 1, 2014. According to the proposed amendments, closed and open joint stock companies along with superadded liability companies will cease to exist within the Russian Federation. All joint stock companies (JSC) will be divided into public and non-public companies instead of preexisting legal forms.
Public companies are proposed to be qualified as JSC, securities of which were ever placed by public offering or traded publicly on the terms specified by the securities laws.
Alexander Konovalov, the Head of the Ministry of Justice of the Russian Federation, stated that more than 85 % of the legal entities are registered at the moment as limited liability companies. At the same time, such legal forms as general partnership and superadded liability companies appeared to be the most unclaimed.
According to representatives of the Ministry, closed joint stock companies fail to justify their existence, as far as their status is actually duplicated by limited liability companies. Thus, it is submitted to constitute the division on public (open) and non-public (closed) joint stock companies instead of existing forms of open and closed joint stock companies. In addition, Mr. Konovalov placed emphasis on the fact that there is no need to re-register earlier established legal entities and to re-record real estate titles.
Division of JSC on public and non-public entities won’t influence the number of companies obligated to disclose the full set of existing facts. In this respect, several thousands of JSC that were released from disclosing information by the form of existing facts prior to introduction of amendments are now to disclose condensed amount of information (annual statements, annual accounting reports, lists of affiliated persons), due to the fact that in the past these companies carried out public placement of securities.
According to specialists, the proposed bill is focused on arrangement of the conditions for establishing of corporate management models. Besides, the submitted amendments are to contribute simplification and regulation of control over JSC.